It's The Economy, Stupidhttp://davidwcampbell.com
David Campbell - A blog about economic development in Atlantic CanadaWed, 21 Feb 2018 13:20:13 +0000en-UShourly1http://wordpress.org/?v=4.2.19The myth of the full time workerhttp://davidwcampbell.com/2018/02/the-myth-of-the-full-time-worker/
http://davidwcampbell.com/2018/02/the-myth-of-the-full-time-worker/#commentsWed, 21 Feb 2018 13:20:13 +0000http://davidwcampbell.com/?p=7104Continue reading →]]>If most of us were asked to describe what ‘work’ looks like I suspect we would talk about getting up in the morning, going off to work – maybe fighting rush hour traffic, putting in eight hours and then going home.

The truth is that across Canada only about 50% of us actually worked full time and all year in 2015 (Census data). The rest of us (all workers) worked part time or part year or part time and part year. You can break this data down further into age groups and tease out students, etc. but at the end of the day a lot of people work part time or seasonal jobs.

Why this matters is that many people working seasonal or part of the year are considered ‘unemployed’ when they are not working. As I have written before this distorts the labour market picture around the province and can lead to policies – and business decisions – that are holding back growth.

The following table shows a select group of communities by the number of persons working either part time or part year (at the municipality level I can’t break out part time or part year), the share of total workers and the average weeks worked during the year. In the northeastern part of the province only about 35% of the population works full time and year round. The other 65% work part time and or seasonal jobs. In Bas-Caraquet only 19% of workers were employed full time and full year.

There are other pockets around the province that have a high share of part time/part year workers. Miramichi, some communities in Charlotte County, etc. but when you get to the larger urban centres the communities start to look more like the national labour market.

Again this is not a criticism per se or any kind of a judgement. I’ll leave that to others. My interest is ensuring firms around the province – from restaurants and grocery stores to fish plants and trucking firms – have workers and I think we are pretending there is an available workforce (i.e. with the skills and interest in the available jobs) in many of these communities when there is not.

]]>http://davidwcampbell.com/2018/02/the-myth-of-the-full-time-worker/feed/2It’s time to end the EI fictionhttp://davidwcampbell.com/2018/02/its-time-to-end-the-ei-fiction/
http://davidwcampbell.com/2018/02/its-time-to-end-the-ei-fiction/#commentsFri, 09 Feb 2018 11:44:35 +0000http://davidwcampbell.com/?p=7099Continue reading →]]>There’s a story on the CBC website this morning about the plight of workers on EI that work seasonally at Kings Landing. It’s unfair, they say, because they get fewer weeks of EI than their counterparts in the Village historique acadien. The trusted federal government labour market economist patiently explained that the policy is that EI weeks are longer in areas of high unemployment because it is presumed to be harder to find a job in areas with high unemployment.

But if no seasonal worker is actually looking for work why does the unemployment rate matter? In fact, mathematically the higher rates of seasonal EI usage push up the unemployment rate leader to longer weeks of EI collection. Because of this folks on EI should cheer when the unemployment rate goes up.

It’s time to stop the fiction that is the EI program – or to reform it. The gentlemen complaining that their EI has run out live within a short commute of Harvey (unemployment rate of 43.9% from the Census) and Nackawic (22.4% unemployment rate). They live reasonably close to Woodstock and Fredericton that have low unemployment rates. According to NBJobs.ca there are more than 500 jobs on offer right now within a 50km radius of Nackawic.

But as the gentleman in the article implies he has no intention of working another job as his real job starts in May. He just needs EI to cover him from February to May and, besides as he says – who would hire him to work for just a few months?

From the Census we know that nearly 50 municipalities in New Brunswick have unemployment rates of more than 20%. This should be a crisis of Grecian scale but there are lots of employers in those communities and surrounding areas struggling to find workers. And the MP for that area is dutifully looking for a solution (i.e. so those workers can get more EI).

In 2015 there were 54,000 people that lived outside NB’s urban centres who collected EI at some point during the year or 37% of everyone that collected wages/salary income. A large share of that 54,000 works seasonally and it is fiction to think they are ready and willing to work the jobs on offer in their communities and surrounding areas.

So we either a) reform the EI system to compel people to work even if they don’t want to (i.e. they work at Kings Landing for 5 months and Walmart for 7 months every year – its almost guaranteed that Walmart would agree to this arrangement; or b) we move the people on seasonal EI (i.e they have collected EI at least 3 years in a row) out of the labour market altogether and fund them separately with the understanding they have no intention of working outside of their seasonal job.

I believe the unemployment rates around the province would drop precipitously if we did this.

The problem here is more than just the fact that unemployment rates are distorted. It drives broader government policy. Why do we need immigrants when we have 40% unemployment in Harvey? We set up ‘training’ programs for EI workers but they are really just a bridge to pay people between seasonal work.

It’s time to change this now. I realize it is toxic for both provincial and federal politicians – the mighty federal Cabinet Minister Doug Young was brought down because of EI tweaks back in the 1990s.

This is no excuse not to act. This issue is holding back our province and its economic potential.

If you go back to the 1950s, depending on the measure you use the wage ‘gap’ between New Brunswick and Ontario was around 40% – meaning on average you could earn 40 percent more in Ontario than you could here in New Brunswick. This is just wages – not net worth which has more factors such as the value of your housing, accumulation of savings, etc.

There has been a steady decline in this wage gap since. In 2016, using Statistics Canada’s Survey of Employment, Payrolls and Hours the average weekly wage (including overtime) in New Brunswick was 10% less than in Ontario – up from 15% less a decade ago. The table below expresses this as an index with the Ontario wage being 1.00. Anything below 1.00 means wages are higher in Ontario and above means wages are higher in New Brunswick (average weekly wages). We are really seeing upward pressure on wages in the sectors that are having the hardest time recruiting workers. Look at truck transportation. In 2006 there was a 19% wage gap with Ontario and that has essentially evaporated. Look at grocery stories and building materials stores. Already average weekly wages are higher here. Nursing care is an interesting one. There are many pushing for higher wages in this sector (and home care) as a way to draw more in to the workforce. Government essentially sets the wages in this sector. The average weekly wage in this sector is already 10% more than in Ontario. How high should it go? Computer systems design and services (the main IT industry) is another interesting example with wages now basically on par with Ontario.

An interesting counterpoint is insurance. This industry is booming in New Brunswick as national firms are expanding their operations in this province serving clients across Canada – but the work is mostly back office and customer support which is not high wage which is why the index is going the other way. This is a good thing in this case. Would you rather have a few high paying jobs serving just the local market or a large, export sector bringing in several hundred million in revenue but with jobs that don’t pay as much?

Of course there are usual caveats here. Average weekly wages are not the same as starting wages. But it certainly looks like Ontario is able to more easily fill jobs in the $12-$15/hour range than New Brunswick these days. This is likely due to the high flow of immigrants and also likely why the Wynne government is moving to a $15/hour minimum wage to force up wages at the lower end of the labour market spectrum.

Rising wages are a good thing if they are tied to productivity and overall industry profit growth. But in tight margin industries without productivity gains, the jobs that are mobile (i.e. those that can be done elsewhere like trucking) will leave if wage rates get too high.

All I can say is that in the past few years, this region has done – the Maritimes – has done particularly well when it comes to the contribution of the IT sector to GDP growth. New Brunswick and Nova Scotia had a few years in the valley but between 2014 and 2016 the two provinces are leading the country for IT GDP growth. Note that I excluded telecommunications (the C in ICT) because most of that GDP is from your spending on Netflix and cellphones. I also exclude IT manufacturing (computers, etc.) because like just about all other non-natural resources-based manufacturing it is most done in Quebec and Ontario.

With these caveats something seems to be working right now in the Maritimes – fake companies or not. Maybe it is fake GDP?

It is important to put things in perspective. The entire IT sector in New Brunswick (as defined above) contributed $370 million in real GDP to the province in 2016 – or 1.4% of total GDP. To put that in context, if the IT industry doubled its GDP contribution in a single year it would only boost provincial GDP by 1.4%. We need, IMO, to get back to 2-3% GDP growth per year in this province so don’t expect the IT industry to do the heavy lifting.

]]>http://davidwcampbell.com/2018/02/are-we-fostering-fake-startups-separating-fact-from-hyperbole/feed/0Engineering economic development: Who’s got the power?http://davidwcampbell.com/2018/02/engineering-economic-development-whos-got-the-power/
http://davidwcampbell.com/2018/02/engineering-economic-development-whos-got-the-power/#commentsFri, 02 Feb 2018 09:35:42 +0000http://davidwcampbell.com/?p=7086Continue reading →]]>I see that Quebec City-based Englobe Corp. has bought Crandall Engineering following a trend of national and international firms scooping up New Brunswick-based engineering firms (ADI, etc.). It might just be me but it seems that an increasing number of New Brunswick firms are being scooped up by national or international firms. New Brunswick’s dairies are now all owned by Quebeckers but we are seeing this trend in vision care, funeral homes, insurance brokerages, etc.

The engineering sector is a particular concern because at least some of the firm were actually doing export-based work from here. In other words, the engineering sector was a high value, export sector bringing in several hundred million in export revenue each year fueling the salaries of highly paid engineers. I hear Hatch has already left Moncton and there is a fear that over time Englobe will do more and more of the work that Crandall used to do in Moncton from Quebec. They will keep a physical presence here but less and less highly paid engineers.

So far the Fredericton example is mixed. I am hearing that some administrative and management functions in the engineering sector have moved to Toronto and Calgary but the Statistics Canada data suggests there are more engineering-related workers in Fredericton today then there were back in 2006. In fact there are 27% more in 2016 than in 2006 as shown in the chart.

That is not the perfect statistic because at least some of these engineers work for government in Fredericton. But if you look at industry employment there are 1,115 persons working in NAICS 5413 Architectural, engineering and related services in the Fredericton CA (2016) up from 1030 in 2006. We can’t get more granular than that with the industry data. So, the industry is still growing in Freddy Beach but not as fast as the rest of Canada. In 2006, 49 out of every 10,000 people working in this sector across Canada were in the Fredericton CA. By 2016 that had dropped to 45.

The truth is that companies based outside New Brunswick have less affinity to New Brunswick (quelle surprise!). So they will, over time, do the work where ever it makes best sense. We need to make sure it ‘makes best sense’ to do engineering work in New Brunswick – not just local market but export market work as well.

The Moncton CMA already has one of the lowest concentrations of engineers and as I mentioned Hatch closed its Moncton operations (I’m told). This is frustrating as 5-6 years ago they were talking about putting a ‘centre of excellence’ in Moncton.

As the national economy moves towards more of a services economy, exporting high value services is the next big driver of the Canadian economy. Small places like NB are at a disadvantage but we have a proven track record of firms that can export services – accounting services, engineering services, business support services, IT services, etc. We are not good at exporting legal services, marketing/PR services, language translation services, etc.

It behooves local and provincial economic development agencies to build a strong relationship with the national and international engineering firms here and try and figure out what it would take to ensure they keep growing here.

]]>http://davidwcampbell.com/2018/02/engineering-economic-development-whos-got-the-power/feed/1Competition is good, comrades!http://davidwcampbell.com/2018/02/competition-is-good-comrades/
http://davidwcampbell.com/2018/02/competition-is-good-comrades/#commentsFri, 02 Feb 2018 02:11:31 +0000http://davidwcampbell.com/?p=7084Continue reading →]]>I’m watching Comrade Detective on Amazon Prime Video while on the treadmill these days. It’s a fascinating thing to behold. The show is a Romanian detective show from the 1980s that is completely laced with socialist propaganda. All dialogue and sets/scenery is meant to scorn the West and capitalism and boost the ideals of Leninism. But the result is a kind of odd comedy. There’s a scene where the two cops are in the U.S. embassy and they watch two very, very fat men sloppily eating a tray of Big Macs while reading the magazine “Guns & Ammo”.

I wonder what Romanians actually thought/think of that show then – and now. It’s an entertaining show and Amazon says millions of Romanians tuned in every week to watch.

But it got me thinking that competition is good – competition in markets and in the marketplace of ideas.

When you don’t have competition it can lead to sclerosis. If your house is burning down it forces you to act. If the Soviets are knocking at the door, it focuses the mind. BTW when I went to school in the U.S. in the mid 1980s they were still having nuclear war drills in schools. I was never quite sure how cowering under you desk was going to help you escape the mushroom could, but I digress.

New Brunswick needs a little shakin’ up. Right now there isn’t much competition for new ideas.

We need a lot more immigrants. We need more openness to natural resources development. We need to be able to get things like municipal reform done. We need to have an honest debate about health care. I heard some economist throwing around the term 25% HST this week – in reference to NB being able to fund health care. It’s not going to happen. I am pretty sure the economy will collapse long before tax rates got that high – unless the 25% HST is across the country then people and investment have nowhere to hide (at least in Canada).

]]>http://davidwcampbell.com/2018/02/competition-is-good-comrades/feed/0Stranger Things: New Brunswick labour market editionhttp://davidwcampbell.com/2018/01/stranger-things-new-brunswick-labour-market-edition/
http://davidwcampbell.com/2018/01/stranger-things-new-brunswick-labour-market-edition/#commentsMon, 29 Jan 2018 16:03:10 +0000http://davidwcampbell.com/?p=7080Continue reading →]]>Statistics Canada recently published a report stating that the growth in paid employment in New Brunswick is highly correlated to the growth in the working age population.

Quelle suprise.

The article seems to imply the causality is one way. If you have lots of jobs, the people will come to the jobs. If you lose jobs you will lose people. But as I have pointed out before there are jobs that have that magnetic effect and jobs that do not. New Brunswickers will move to Alberta for $100k+ jobs but are less likely to move to Alberta for minimum wage jobs. So, Alberta has boosted the number of immigrants in recent years and many of them are going into services and other jobs that it would be hard to get people from the rest of Canada to move there to take.

The truth is that there are a lot of jobs in New Brunswick right now that are going unfilled or that are really hard to fill. These are not ‘magnetic’ jobs – for the most part Canadians will not move to a community to work in a fish plant, a <$15/hour manufacturing facility or customer contact centre and a host of personal services, retail, food and accommodation jobs.

This is what puzzles me about the CBC article. It quotes one of my favourite migrants – Dr. Herb Emery as follows:

“Whereas, governments are increasingly focused on adding people first and hoping that that will drive labour demand by potentially driving capital in or unlock business potential where there’s perceived labour shortages, this study really points to the fact that it really is labour demand which ultimately comes from the export sector, which is driving everything,” he said. He pointed to examples of government strategies to bring more people to Atlantic Canada, like the Atlantic Immigration Pilot, that is aimed at bringing more immigrants to the region to stimulate the economy.

Emery knows full well the Atlantic Immigration Pilot was set up specifically to deal with existing and real labour demand not primarily to bring in people willy nilly. In fact, the AIP’s explicit purpose is to avoid bringing in immigrants without a job and economic prospects.

The fact of the matter is that we have anecdotal and statistical data showing a decline in employment in many export-focused sectors because of a lack of workers. I just heard this week that one of the larger foreign-owned fish plants is close to shutting down because their TFW allocation is down to 15% of the workforce and they are really struggling to fill the other 85%. While the jobs are not high paying by any stretch and they are hard work too – if that plant shuts it will have a seriously negative effect on that local community.

This is the definition of labour demand. Now, there is a good point about productivity and efforts to drive up wages. This is good but not at the point it pushes firms and their export revenue out of New Brunswick.

Dr. Emery is right when he says: “What we could be doing is focusing on making business conditions in New Brunswick more favourable for investment, which really means that even at whatever the world prices are for lumber, timber, fish, whatever we’re going to produce, that our producers are competitive”.

If we increasingly can’t fill the jobs on offer it will (and is) have a dampening effect on the economy. We can wait around for mining and higher high wage jobs to come back to New Brunswick but I’m not willing to sit around and do nothing.

Bring in immigrants. If some leave so be it. As I have said many times before human capital is starting to look a lot like financial capital. If it becomes too scarce it is a barrier to growth.

]]>http://davidwcampbell.com/2018/01/stranger-things-new-brunswick-labour-market-edition/feed/0Be a little careful with the youth unemployment datahttp://davidwcampbell.com/2018/01/be-a-little-careful-with-the-youth-unemployment-data/
http://davidwcampbell.com/2018/01/be-a-little-careful-with-the-youth-unemployment-data/#commentsWed, 24 Jan 2018 12:13:10 +0000http://davidwcampbell.com/?p=7075Continue reading →]]>Youth unemployment is back in the news after new data suggesting we still have a high unemployment rate among the young. The government just announced a whack of money to alleviate the pain of high youth unemployment. While high unemployment rates are not a good thing it is important to always put statistics in context. That is hard to do in the modern world of infographics and the need to cut through the clutter with a killer stat.

If you look at the unemployment rate among youth in New Brunswick it is mostly concentrated in the 15-19 year old cohort of which 84% are still in school. We have to differentiate among the unemployed that are living at home with their parents and going to school and young people that are starting to build their careers and struggling to find work. The 20-24 age group is more of a problem as only 42% of them are in school but the unemployment rate among that group is down to 10.3% – still too high. The real concern for me is the 9.6% unemployment rate among the 25-29 year olds. By the time you get to the 30+ the workforce unemployment rate is down to 6.4% – well below average.

We can use Census data to dive a lot deeper on this issue. When you look at the actual number of unemployed in the 15-19 age group around New Brunswick you find only 150 unemployed in the Moncton CMA, only 100 in the Saint John CMA and only 140 in Fredericton. If you drive around each of those communities you will find help wanted signs in restaurants, retail stores, etc. I’m just trying to put the 18.6% unemployment rate in context.

Among those 25-29, when you look regionally the absolute numbers are also quite small. There are lots of potential reasons why the unemployment rate among that cohort is too high including a mismatch between skills, interests and the jobs on offer in local communities. The EI system is likely boosting those numbers a bit. A new immigrant I chatted with recently lost his job and was told “not to run out and get another job to hastily” and to “take your time and enjoy the time off with your family”. He ignored that advice and got a job in a few weeks.

My fear, of course, is that the perceived (and actual) higher unemployment among young people in New Brunswick will keep us from focusing on addressing real labour shortages around the province.

If you look at the unemployment rate by major occupational group you will see that unemployment among most occupational groups in the province is quite low and comparable to the national average. It’s only when you get into the trades, trucking, natural resources and manufacturing occupations where you start to see a substantially higher unemployment rate. Again the influence of seasonality is probably driving up the rate in these sectors. Yes, I admit that conceptually it is hard to justify high unemployment rates and labour shortages at the same time but that is a New Brunswick reality. Person X works in a seasonal manufacturing or natural resources job while company Y can’t find year round workers in manufacturing or natural resource jobs.

]]>http://davidwcampbell.com/2018/01/be-a-little-careful-with-the-youth-unemployment-data/feed/0Shediac: New Brunswick’s most cosmopolitan municipality?http://davidwcampbell.com/2018/01/shediac-new-brunswicks-most-cosmopolitan-municipality/
http://davidwcampbell.com/2018/01/shediac-new-brunswicks-most-cosmopolitan-municipality/#commentsSat, 20 Jan 2018 13:24:09 +0000http://davidwcampbell.com/?p=7064Continue reading →]]>As you know I have been crunching a lot of Census data recently and have stumbled on some quirky stats. The latest relates to the megalopolis of Shediac. The Census provides information on population mobility – specifically asking where people lived five years before. They break the data into non-movers and movers. Among the movers, the data is broken into migrants and non-migrants and among the migrants, the data is shown for internal migrants (moved within the same municipality, intraprovincial migrants – those moving in from other parts of the same province, interprovincial migrants – those moving in from other provinces and external migrants – those moving in from other countries.

Among the population 5+ (for obvious reasons), Shediac is the only municipality in the top 10 for intraprovincial, interprovincial and external migrants among New Brunswick’s municipalities (I only looked at those with at least 3,000 population). All told, nearly 25% of everyone 5+ living in Shediac in 2016 did not live there in 2011 – just five years’ previous. That is pretty remarkable. Contrast this with Shippagan where only 5% lived outside the municipality in 2011 or Tracadie where only 7% did.

Want to know if your city, town or village made the cut?

Shediac featured the highest level of intraprovincial migration followed by Sussex. Despite the challenges of the potash mine closure a lot of folks are moving to Sussex. We don’t know from this data if it is retirees or folks living in Sussex and working in Saint John or Moncton. The Studholm Parish is also adjacent to Sussex. Why is everyone moving to Greater Sussex? Moncton in this case is the Parish – not the city. Cheaper taxes. Up mostly on a hill.

Which municipalities attracted the most people from outside New Brunswick? Oromocto, of course, but it is an outlier. Why 10% of the Burton population is from outside New Brunswick is a mystery. Nearly 500 people live in Burton now that lived elsewhere in Canada in 2011. Likely the Oromocto effect (?). Great to see Woodstock here and also in the external migrant (immigrant) top 10. Woodstock is becoming an interesting place – a bit under the radar. We have friends that moved there recently for work. Overall nearly 1 out of every 5 Woodstockians in 2016 did not live there in 2011. Also cool to see St. Stephen as it has been pushing to attract folks from elsewhere in Canada. It’s working, folks!

On the immigrant front, Fredericton leads the with Woodstock a close second – giddy up. Moncton, Saint John and Dieppe rounding out the top five. Good to see Edmundston in this list – the percentage is low but moving in the right direction. For now only Woodstock and Edmundston are attracting any level of immigrants – outside the big three urban centres and their surrounding municipalities.

]]>http://davidwcampbell.com/2018/01/shediac-new-brunswicks-most-cosmopolitan-municipality/feed/0Dr. Strangebedfellows or: How I Learned to Stop Worrying and Love Amazonhttp://davidwcampbell.com/2018/01/dr-strangebedfellows-or-how-i-learned-to-stop-worrying-and-love-amazon/
http://davidwcampbell.com/2018/01/dr-strangebedfellows-or-how-i-learned-to-stop-worrying-and-love-amazon/#commentsMon, 15 Jan 2018 21:12:42 +0000http://davidwcampbell.com/?p=7062Continue reading →]]>Over the Christmas season I had a craving for Cherries Jubilee, a decadent dessert featuring a warm Bing cherry sauce served over vanilla ice cream. I went online, downloaded the ingredient list and went to the grocery store. One ingredient, cherry extract, was not available in the store so I went to another and then another with no success. I went home and finally found a small health food store that offered cherry extract. I drove to that store, bought the product and came home. The elapsed time from the start of my quest for cherry extract to securing the product? Nearly 2 hours.

I could have just as easily went to Amazon.ca and used my Prime subscription to order cherry extract from multiple sources delivered to my door in 2-3 days at the same or a lower price.

This is why more and more people are just ordering online. I recently ordered Keurig coffee pods online. In fact, if you look at the 20-30 of my most recent Amazon purchases – it is likely that a local store here in the Moncton region carried those products likely at a similar price. Why can’t I find them online?

I think all retailers – particularly smaller ones – should be online and linked to a platform like Amazon. Like eBay I should be able to find the products I want – general or niche – from a local supplier and not have to order from Toronto or even the U.S. for basic goods.

Further, those retailers selling highly niched products – birch bark essence for example – should be based here and selling those products around the world.

I’ve always found it strange. I know that these little retailers would need to have some form of online-linked inventory and shipping system but there must be off the shelf systems for reasonable prices.

Most people would prefer to patronize a local shop to buy goods and services but they want convenience and are sensitive to price. We can either give up that growing segment of the market or we can embrace it.

]]>http://davidwcampbell.com/2018/01/dr-strangebedfellows-or-how-i-learned-to-stop-worrying-and-love-amazon/feed/1Men Are from Mars, Women Are from Venus: Workforce editionhttp://davidwcampbell.com/2018/01/men-are-from-mars-women-are-from-venus-workforce-edition/
http://davidwcampbell.com/2018/01/men-are-from-mars-women-are-from-venus-workforce-edition/#commentsSat, 13 Jan 2018 15:39:46 +0000http://davidwcampbell.com/?p=7057Continue reading →]]>One of my problems is distraction. I’ll be crunching data for a report or presentation and stumble on a tangential piece of data that is interesting. For example, the new annual Labour Force Survey data for 2017 recently came out and includes some interesting trends. But I decided to go back 40 years to look at long term trends. In 1977, I was 10 and used to walk to the convenience store in lower Lincoln near the airport to buy grape and orange flavoured potato chips. I suspect only a handful of my readers will remember that short-lived but interesting snack food trend.

Since 1997 as you would expect, the male and female workforce in New Brunswick has essentially converged. In 1977 there were 181 men working in New Brunswick for every 100 women. In 2017 it was 103 men for every 100 women.

But most of the net growth in the female workforce has been concentration in a few sectors. As the table below shows, 40 years later than are 5,300 more men working in health care and social assistance but more than 33,000 more women. If you think there are more men in education these days you would be wrong. The distribution may have changed (i.e more male high school teachers) but the overall number of men in education has not changed in 40 years while the number of women has risen by nearly 9,000.

There are fewer men working in public administration in 2017 as there were 40 years ago. women have accounted for all the net employment growth in public administration over 40 years. In fact, if you add health care, public administration and education there are just under 5,000 more men working in those public sectors but nearly 49,000 more women.

Women still are not going into construction and manufacturing in any serious way. The incremental number of men in professional and business services has out-paced women over the 40 year period. Along with construction, those three sectors are the only industries where men have outpaced women in net growth.

]]>http://davidwcampbell.com/2018/01/men-are-from-mars-women-are-from-venus-workforce-edition/feed/0The exogenous shock theory of economic developmenthttp://davidwcampbell.com/2018/01/the-exogenous-shock-theory-of-economic-development/
http://davidwcampbell.com/2018/01/the-exogenous-shock-theory-of-economic-development/#commentsSun, 07 Jan 2018 12:47:21 +0000http://davidwcampbell.com/?p=7055Continue reading →]]>In the early 1990s when I first started thinking about economic development I had a chat with a Quebec consultant who was helping the provincial government there develop economic growth strategies. He was convinced the only way to grow was through ‘exogenous’ shocks which he defined as a big scale, brand new industry where substantial national and international investment flows into a province contrasted with organic growth by trying to encourage local firm expansion.

This was the reason Quebec put the most aggressive tax breaks/R&D support for pharmaceutical development in the 1980s and 1990s and, presumably, why they have the most lucrative incentives for digital media in North America. I read somewhere that one firm, Ubisoft, has benefited from $200 million worth of incentives.

The natural resources boom in Saskatchewan is an example of this. Market prices for commodities rise, the province puts in support for the industry and boom – uranium, potash, fracked oil, etc. power Saskatchewan to one of the fastest growing provinces or states in North America (BTW NB has natural gas, potash and uranium deposits).

A massive inflow of people and their investment dollars can be an exogenous shock – think of the amount of flow into British Columbia at the time of the Hong Kong transfer back to China.

Of course, local firms benefit from efforts to attract exogenous investment. Many of Quebec’s most interesting bio/pharma firms are startups that evolved from the 30 year effort to attract pharma investment.

The only big example of this effect in New Brunswick was the contact centre/back office sector. While we have attracted investment into other sectors, none really rise to the level of making a serious impact on the economy. Aquaculture was a fast growing sector but it was mostly from within. Blueberries too although I think the attraction of national and international investment into value added processing is likely going to be key to long term growth in the sector.

I think there is some credence to this theory. Economies grow by increased investment and trade and the secondary effects that come from that primary growth (e.g. population growth). Governments should be very focused on how the policy environment can support exogenous growth – although there is considerable debate about the merits of deep incentives/tax breaks as a long term economic development tool.

New Brunswick is trying this approach – at least at a moderate scale – with cybersecurity, cannabis and the Smart Grid. There have been national and international firms investing in those sectors. Whether any of them will get to a place where NB is known internationally is yet to be seen.

]]>http://davidwcampbell.com/2018/01/the-exogenous-shock-theory-of-economic-development/feed/0Where are the young entrepreneurs?http://davidwcampbell.com/2018/01/where-are-the-young-entrepreneurs/
http://davidwcampbell.com/2018/01/where-are-the-young-entrepreneurs/#commentsFri, 05 Jan 2018 11:49:11 +0000http://davidwcampbell.com/?p=7048Continue reading →]]>We have been debating the curious lack of young entrepreneurs in New Brunswick for years. It’s hard to define the term ‘entrepreneur’ but if you look at self-employment as a proxy – New Brunswick has always had well below self-employment rates among those aged 35 and under. Across all sectors of the economy there are 36% fewer persons under the age of 35 that identify themselves as self-employed on the Census.

When you look at high value sectors such as IT, engineering, accounting, consulting, etc. the young person self-employment rate across the board is well below average in New Brunswick.

If you go a little deeper and look at urban centres, the data doesn’t get much better although you have to be even more careful because Statistics Canada reports employment by industry data in increments of five so for sectors with small levels of employment the numbers can be a bit out of whack. For example, Statistics Canada reports there are no people self-employed in the Moncton CMA in software development in the age cohorts 15-24 and 25 and 34 Technically there could be 2 in the 15-24 age group and 2 in the 25-34 age group – 4 in total – and it would be showing up as zero in the Stats Can data.

With that as a caveat – and an issue facing all urban centres – New Brunswick’s urban centre still have low rates of self-employment among young people (under 35) particularly in strategically important sectors. The following table compares the combined self-employment in three IT sectors – as a share of total employment in those sectors then compared to the national level. Moncton and Saint John are at the low end of the spectrum. Fredericton isn’t listed because it is not showing any under 35 self-employment in these three sectors (again subject to the increment of 5 caveat above).

There could be problems with the data itself. It’s hard to believe there are only a very few if any self-employed people in Fredericton under the age of 35 in these three sectors. I don’t ask people their age but I have met a number in the past couple of years that must be under the age of 35. But this wouldn’t be a problem in the province-wide data where the number are larger.

But the bottom line remains. Using this data it would seem there are far fewer young (under 35) tech entrepreneurs in New Brunswick than average despite the fact that almost every city has beautiful facilities with colourful couches and young, smiling faces ready to help you reach your potential – not to mention earnest government officials with their chequebooks at the ready.

As I mentioned above we have been debating this for years. There are many reasons cited: 1) Some say young NBers are encouraged by parents to ‘get a real job’ because of the historical uncertainty around the economy: 2) Others say we export our entrepreneurs (Dr. Haan’s research shows you are far more likely to own a business if you were born in NB and leave than born in NB and stay); 3) Some say it has to do with the structure of the economy – more rural, lower levels of professional employment overall – means less potential for entrepreneurship.; 4) Some even suggest – with some international data to back it up – that a lack of entrepreneurship is self-perpetuating. A person with a parent that works for themselves is far more likely to go into entrepreneurship; 5) Some blame a lack of immigration – self-employment rates among immigrants are higher – particularly in ‘tech’ sectors; and 6) Finally, some point to the lack of large industry ‘incubators’ that are traditional sources of entrepreneurs (for example there are DNA links between the former NBTel and something like 50% of the tech. firms in New Brunswick that have reached any kind of scale).

Who knows. It could be, and likely is, a combination of all these factors and more.

But the bottom line is that we are not seeing the next generation of ambitious entrepreneurs arising in the province.

Just to be clear this is not just about ‘young’ entrepreneurs. Overall rates of self-employment (all age groups) are also lower. For the IT sector, there are 58% fewer self-employed in Saint John, 67% fewer in Fredericton and 44% fewer overall in New Brunswick when compared to the country as a whole.

Instead of spending all our time studying the ecosystem itself – sources of funding, incubators, cluster effects, etc. I think we should spend a little more time on the front end – where do entrepreneurs come from? And what role, if any, should governments, educational institutions, the research community, etc. have to influence this pipeline?

We need to see more high value IP-based startups coming out of our universities (Dr. Shukla is working on this in Fredericton as one example). We should see if our large industrial players have any potential to foster high value startups in their supply chains (Dave Grebenc, et. al. working on this) and we need to see if there are high value entrepreneurial opportunities that could emerge as the result of New Brunswick being a really good place for certain growth industries (cybersecurity, smart grid, etc.).

Maybe we need to attract a lot more entrepreneurs to our shores. I know that will sound like heresy to some but if we are exporting entrepreneurs – like Haan surmises – maybe we should start thinking about importing a few. Then the question becomes why would they want to come here? Now we are starting to have a real conversation about economic development.

Reading those condescending LinkedIn posts about the young HR managers taking a ‘chance’ on the 50+ workers now takes on special meaning. One I read today talked about his great success hiring 50+ workers because they “bring their own lunch” and won’t switch firms for a “two dollar/hour raise”.

IMO people should be just hitting their career stride by 50. I have had an interesting journey that involved a job where I was part of a team that attracting 30+ multinational firms to New Brunswick; I helped a young startup company increase its sales by 8x and its staff by 4x over a six year period; I started a successful consulting firm with clients in six Canadian provinces and two U.S. states; and I completed a 2+ year stint as Chief Economist with GNB. On the side I have been writing a column with the Telegraph-Journal for over a decade (excluding the GNB stint); was a research fellow at the Donald J. Savoie Institute and got to collaborate with the Conference Board of Canada on multiple occasions. I also have written articles/commentary for seven magazines and was a contributing author for three books.

I was born in December 1967 – the year of Canada’s Centennial which I suspect was a little less tense than the 150 seems to have been. Lester Pearson asked all Canadians to have a centennial project – plant a tree, etc. My parents had me. I was a gift to Canada. To all my Twitter trolls out there – there are no refunds.

And just to confirm David Dingwall’s “I’m entitled to my entitlements” ethos was alive and well in Canada 50 years ago, my mother’s doctor suggested he would induce birth (I was due in early January) if she wanted so they could get whatever child tax credit that was available back then.

Almost 15 years ago a trusted friend told me if I wanted to ‘make it big’ I would have to speak to a national audience. New Brunswick was too small. I started writing briefly for the Globe & Mail’s Economy Lab (online) but after a year or so I gave it up. I had several good job offers in Ontario. I have resisted because I like it here and I like my little niche fighting the battle for hearts and minds here.

While I now generate more consulting revenue outside New Brunswick, my goal is still to try and positively influence change right here in the little old picture province (or drive thru province?).

Have I had any influence on New Brunswick’s economy and economic development policy? It’s hard to say. I fought and lost the fracking battle. I was on the wrong side of a number of big policy battles over the past 20 years. I have played a small role, I think, in a greater focus on accountability and measurement in government economic development activities. Although I worry now that some – particularly municipal – governments are putting too much focus on metrics – particularly those metrics that are out of the control of economic development organizations.

I plan on spending the next 25-30 years continuing to fight for a New Brunswick that is more globally connected, attracting more international investment, entrepreneurs and people and for a New Brunswick that is more self-confident. And for a New Brunswick that is safely and sustainably developing its natural resources.

I believe we are at a fundamental crossroads in this province. We have never in our history been in this place before and it will take a lot of effort to emerge as a growing and dynamic economy. We have to treat people attraction the way we used to treat company attraction. We need to be one of the best places in North America to migrate to. If we can get there that will be a huge benefit as we move forward as a province.

So you can expect a continued stream of content on these pages. I have written 3,500+ blogs over a 14+ year span. That is a staggering amount of content. Combine that with over 500 columns, articles and book chapters – not to mention hundreds of reports for clients – and that is a heck of a lot of content.

As a means of generating household income, it helped my wife and I raise three pretty interesting and well-rounded kids. That in itself makes me grateful.

]]>http://davidwcampbell.com/2017/12/turning-the-big-5-0/feed/3Attracting international R&D: In praise of Siemenshttp://davidwcampbell.com/2017/12/attracting-international-rd-in-praise-of-siemens/
http://davidwcampbell.com/2017/12/attracting-international-rd-in-praise-of-siemens/#commentsFri, 22 Dec 2017 12:48:18 +0000http://davidwcampbell.com/?p=7034Continue reading →]]>One of the issues we discuss very little in New Brunswick is the role of multinational firms. When we do, many people derisively talk about how we need to ‘take care’ of our own firms and they express skepticism about why international firms would want to set up in New Brunswick unless they get massive corporate welfare.

One famous NB CEO, who shall remain unnamed but you will likely figure it out, a few years ago after winning his 99th award for business excellence got up and said something like “We don’t need any outside companies coming here and saving our bacon” and then decried provincial government efforts to attract firms. I winced – this is exactly the kind of crap that holds us back. Of course, the great irony of this story is that this same CEO is now buying up firms around the world and, one assumes, making the case that foreign investment from his firm will be very beneficial to those jurisdictions.

This is among the most frustrating issues for me as it points to our collective self-confidence problem. The question is not why would these firms want to locate in New Brunswick it should be why wouldn’t they want to locate in our province?

But our collective self-confidence problem aside, I was looking at some interesting data this morning that points to another important role for multinational firms in Canada – as drivers of R&D.

Statistics Canada looks the amount of total in-house research and development expenditures by firms in Canada by ‘country of control’ – either Canada or foreign.

In New Brunswick? You know the answer before I tell you. $89 million spent by Canadian-controlled firms and only $11 million by foreign-controlled firms. And, I suspect that one firm, Siemens accounts for a good share of foreign-controlled firm R&D in New Brunswick.

Siemens has something like 50 staff and a major global R&D centre in Fredericton.

Despite our phobia of international firms, I think we should study the Siemens example and figure out if there are other opportunities to attract global R&D investment to our province. Can we boost cannabis R&D here? How about international forest products R&D? How about international cybersecurity R&D?

We are pretty good at attracting contact centres and back offices and even the occasional IT firm. Maybe we should sharpen our pencils and see if there is any potential to attract international R&D here. Compared to the rest of Canada we are really missing the boat on this.

]]>http://davidwcampbell.com/2017/12/attracting-international-rd-in-praise-of-siemens/feed/1NB’s R&D sector – no old fogies allowed?http://davidwcampbell.com/2017/12/nbs-rd-sector-no-old-fogies-allowed/
http://davidwcampbell.com/2017/12/nbs-rd-sector-no-old-fogies-allowed/#commentsTue, 19 Dec 2017 11:26:15 +0000http://davidwcampbell.com/?p=7031Continue reading →]]>As I have detailed elsewhere New Brunswick is primarily known for having an older workforce when compared to other provinces. Not so with the R&D sector where 44% are under the age of 35 – second only to PEI among the provinces and much older the country’s R&D industry as a whole. This could be caused by a number of things such as older researchers are more likely to leave the province or the industry is growing and hiring younger talent.

The NB R&D sector did expand its employment from 435 in 2006 to 555 in 2016. At the same time employment nationally declined by 6% so maybe this is the main reason.

The bottom line is that there are a lot of young, bright millennials in short pants running around the R&D sector. Eric Cook, the boss over at RPC better brush up on Chance the Rapper and Snapchat.

]]>http://davidwcampbell.com/2017/12/nbs-rd-sector-no-old-fogies-allowed/feed/1New Brunswick’s youngest and oldest occupationshttp://davidwcampbell.com/2017/12/new-brunswicks-youngest-and-oldest-occupations/
http://davidwcampbell.com/2017/12/new-brunswicks-youngest-and-oldest-occupations/#commentsTue, 19 Dec 2017 11:10:51 +0000http://davidwcampbell.com/?p=7027Continue reading →]]>The Census gives us good information on the age of workers in the province. While it doesn’t provide a median or average age by occupation it does breakdown the number of people working in 500 occupations (and aggregations) by age cohort. Using this data we can suggest which occupations are the youngest and which are the oldest.

Of course the entire labour market is aging so I am more interested in the difference between New Brunswick and Canada. Which occupational groups are either much younger or older than the national level?

New Brunswick’s 10 oldest occupations are listed below (those with a minimum of 1,000 workers). The oldest by far is NOC 7611 construction trades helpers and labourers where there are 65% more workers over the age of 55 when compared to the national labour market (almost 30 percent in total). Nearly half of all security guards are over the age of 55. Of particular interest, 43% of all home support workers are over the age of 55 – 2000 of them in total – just as we are about to hit a wave of need. Who’s going to be there to change your bedpan?

Of the 500 4-Digit NOC occupations, New Brunswick is younger – by this measure – in less than 10. 56% of early childhood educators are under the age of 35 – 41% more than the share in the national labour market. Interestingly insurance and financial sales occupations is very young occupational group (although the astute among you will note this is a 3-digit NOC but because the rest will not we won’t dig any deeper). The IT industry tends to be a very young industry – compared to the national labour force there are 14% more young people in technical IT occupations.

]]>http://davidwcampbell.com/2017/12/new-brunswicks-youngest-and-oldest-occupations/feed/0Maybe it’s time remove the opaqueness of tax policy. Does it offend Canadian sensibilities?http://davidwcampbell.com/2017/12/maybe-its-time-remove-the-opaqueness-of-tax-policy-does-it-offend-canadian-sensibilities/
http://davidwcampbell.com/2017/12/maybe-its-time-remove-the-opaqueness-of-tax-policy-does-it-offend-canadian-sensibilities/#commentsSat, 16 Dec 2017 13:12:28 +0000http://davidwcampbell.com/?p=7024Continue reading →]]>I just read John Geddes masterful piece in Macleans on the history and influences of Bill Morneau’s tax crusade against the 1%. It reads like a condensed modern biography – a thriller with Geddes unearthing deep background – only partially but tantalizingly relevant to the story itself. A Reform-er once told me back in the 1990s that Ottawa was the most socialist city in North America and it was the job of politicians to restraint their impulses. Michael Wolfson comes across as that guy – the dope smoking, draft dodging American, brilliant, worked his way up the ladder at Statistics Canada, left and kept on fightin’.

Read the bit about how Wolfson dismisses entrepreneurial risk. This, in a nutshell, is one of the ideological parameters of the debate. Are entrepreneurs the engine of the economy and entrepreneurial risk something to be encouraged or are they NEPmen that need to be restrained and controlled by the state? Of course, like any issue there are folks on the far left of that continuum and those on the far right and Canada kind of comes in somewhere…. You decide.

No matter how this current tax debate unfolds, I think full transparency in the tax system is what we need. Canadians maybe don’t like thinking that things are happening behind their backs. Maybe if this corporate structure at the centre of this debate was set up specifically as a vehicle to encourage entrepreneurial risk – and openly so – the debate would be different. But when you have politicians – PMs and Finance Ministers – saying this is just a way for a few hundred thousand ultrarich to dodge paying their fair share of taxes – it gets really tricky. I get a lot of emails from some very bright folks who are confused on this – is Morneau going after the family farm or the ultrarich plutocrat using a shell company to dodge taxes?

A few years ago I tried to calculate what my net tax rate was. I set up a spreadsheet and plugged in income tax (fed/prov), property tax, gas tax, HST, etc. and I worked in the deductions, any credits I had, etc. It was a big job and I am not sure I properly framed it but in the end I got to an effective overall tax rate of about 50%.

At the same time I read a book on the flat tax – going around the U.S. at that time with some interest- and what quite intrigued. In one iteration of that you have one tax – say a consumption tax – and that is high enough to raise all the revenue government needs. It’s clean, net and easy to administer. And, unlike the detractors suggest, you can ensure that it has a graduated effect by rebating taxes paid based on your income.

Anyway I did a little back of the napkin calculation and – without any kind of deep analysis – I think if we used the consumption tax – HST – as the vehicle the rate would have to be something like 35-40%. Talk about a tax revolt.

Now, in fairness, there is some truth to the idea that certain taxes are supposed to go to certain public services. Your property taxes cover the cost of local public services – garbage removal, police, fire, etc. Your federal taxes cover national defense, international relations and programs to smooth out the quality of public services across the country. The gas tax – at least theoretically – is used to raise funds to pay for roads and upgrades – and now to change behaviour related to carbon emissions.

In the end, though, I think we should work harder to be transparent with the tax system. I know that accountants won’t like this because in part they get paid to tinker around with the byzantine system to ensure minimal taxes paid. But even if you keep the byzantine system with the myriad of deductions, and structures, and household vs. personal, and tax breaks for ballet slippers, etc. at least make an attempt to explain it to people.

]]>http://davidwcampbell.com/2017/12/maybe-its-time-remove-the-opaqueness-of-tax-policy-does-it-offend-canadian-sensibilities/feed/0Immigrants and the workforce: Moncton CMA impressive resultshttp://davidwcampbell.com/2017/12/immigrants-and-the-workforce-moncton-cma-impressive-results/
http://davidwcampbell.com/2017/12/immigrants-and-the-workforce-moncton-cma-impressive-results/#commentsSat, 09 Dec 2017 22:02:25 +0000http://davidwcampbell.com/?p=7021Continue reading →]]>One of the mantras I have been preaching for years now is the need to attract immigrants into actual employment opportunities. I realize this is not as simple as it seems given the sometimes strange world of immigration where prospective immigrants with lots of points can get in and ones that have the skills for certain jobs cannot.

The good news is that despite the fairly significant increase in immigration to the Moncton CMA, a high level of these immigrants are participating in the labour market. The table shows the labour market participation rate for urban centres with at least an immigrant population of 5,000. Among all urban centres east of Winnipeg, Moncton ranks 2nd for immigrant labour market participation. Obviously we have to be careful with this data as we have no way of knowing how many of the Syrian refugees are showing up in these numbers (not likely many given the timing of the Census). Also, in certain areas, the immigrant population might be older and there are more retirees in the mix.

But for the most part this is a good news story for Moncton. The more alignment between the inward migrants and actual labour market participation the better.

]]>http://davidwcampbell.com/2017/12/immigrants-and-the-workforce-moncton-cma-impressive-results/feed/0Net worth-less? What’s going on?http://davidwcampbell.com/2017/12/net-worth-less-whats-going-on/
http://davidwcampbell.com/2017/12/net-worth-less-whats-going-on/#commentsFri, 08 Dec 2017 00:33:11 +0000http://davidwcampbell.com/?p=7016Continue reading →]]>Well the new data on household net worth is likely to cause a kerfuffle. Statistics Canada is reporting that median household net worth in New Brunswick dropped by 11% between 2012 and 2016. If you look at the average household net worth the story is different but the issue remains, what gives? Normally, when one province tanks in the data Statistics Canada will have a little more insight in their narrative but nothing here.

Maybe we will see more in the newspaper reports on this but my quick analysis shows something strange. On the household asset side, we have seen steep declines in the value of RRSP holdings, deposits – a collapse in mutual fund/income trust assets and TFSA savings – substantial variations from Canada since 2012.

What happened? Did all of a sudden NB financial planners become horrible at their jobs? A 37% decline in RRSP assets in five years? a 68% decline in mutual funds/income trust assets in five years? Sure, they could be moving around some of the income – we saw a big increase in EPP value (for the group of people lucky enough to have one). I would be curious to have an investment professional weigh in here. We do have the data by income quintile but the figures for the higher income quintiles are not published for New Brunswick. We heard after the government raised the tax rate on high income earners that high net worth folks were trying to shift income to avoid the tax – maybe leave more of it in the business, etc. (leading to the Morneau crusade?). Something’s fishy. It’s hard to believe that in just five years you would see such big variances to the rest of Canada.

On the debt side I can’t quite figure out Statistics Canada’s data. Only a 5% increase on the median value of mortgages on principle residence, a modest increase in credit card debt (from a low base), a decline in median line of credit debt, a decline in student loan debt, a modest increase in vehicle loan debt and declines in other debt – and still Statistics Canada is reporting an overall 26% increase in total debt. I guess my math skills are a bit sketchy these days.

The following chart shows the top line numbers. Remember these figures are for those that actually hold the asset or debt – not everyone.

]]>http://davidwcampbell.com/2017/12/net-worth-less-whats-going-on/feed/0SJ largest IT sector, Freddy largest IT labour pool, Moncton doing finehttp://davidwcampbell.com/2017/12/sj-largest-it-sector-freddy-largest-it-labour-pool-moncton-doing-fine/
http://davidwcampbell.com/2017/12/sj-largest-it-sector-freddy-largest-it-labour-pool-moncton-doing-fine/#commentsSun, 03 Dec 2017 03:33:43 +0000http://davidwcampbell.com/?p=7013Continue reading →]]>Okay, I posted earlier this evening that Saint John has the largest IT sector measured by the number of people working in the IT sector as a share of total employment. It was pointed out to me that lots of IT folks work in non-IT sectors, which is true and I have written about this in the past. When you look at people working in IT occupations (regardless of sector), Fredericton has the highest concentration of IT workers in Atlantic Canada and the urban centre ranks 5th in Canada by this measure. There are lots of IT folks working in government, for example. Moncton improves in its ranking because it has fairly large IT shops within its big employers such as Medavie Blue Cross. Saint John has some of this IT employment within non-IT sectors but not as much as Moncton or Freddy.

So, we can say with certainty that in New Brunswick Saint John has the largest IT sector by employment, Fredericton has the largest IT workforce and Moncton has a strong IT workforce with over 1,700 employed in IT occupations giving it a higher concentration of IT workers than most other urban centres in Canada ahead of places such as Guelph, London and Kingston.

]]>http://davidwcampbell.com/2017/12/sj-largest-it-sector-freddy-largest-it-labour-pool-moncton-doing-fine/feed/0Have fun with numbers! Everyone can play along!http://davidwcampbell.com/2017/12/have-fun-with-numbers-everyone-can-play-along/
http://davidwcampbell.com/2017/12/have-fun-with-numbers-everyone-can-play-along/#commentsSat, 02 Dec 2017 18:17:05 +0000http://davidwcampbell.com/?p=7011Continue reading →]]>What do Riverview, New Brunswick and Niagara Falls, Ontario have in common (besides being named after a body of water)? Saint John, NB has the #1 employment concentration among hundreds of municipalities across in Canada for what industry?

First the ground rules. This is specific to municipalities not urban centres (CMAs, CAs). It is based on municipalities with at least 10,000 in the employed workforce (you have to have some reasonable denominator) and it is based on Location Quotient (LQ) values which calculate employment concentration relative to the national economy. For example, Halifax has a Retail Trade LQ of 1.04 meaning it has four percent more employment in retail trade compared to Canada as a whole and adjusted for the size of the labour market.

What to Riverview and Niagara Falls have in common? They are the only two municipalities in Canada to top the employment concentration chart in two separate two-digit NAICS industries. Riverview is tops in retail trade and administrative and support services (tied with Saint John) and Niagara Falls is tops for both arts/entertainment and accommodation/food. Just to be clear – of the hundreds of municipalities in this list Riverview and Niagara Fall are on top of two each out of 17 industries.

At this point it is important to point out that employment by industry figures from the Census are based on where you live not where you work. Riverview is home to a ton workers in retail trade and administrative and support services – two large sectors of the Greater Moncton economy. If you want proof that the Moncton-Riverview-Dieppe economy is highly interdependent – giddy up.

Saint John, as already stated, is tied for the highest concentration of administrative and support services employment in the country. Where is Moncton, you might ask? It seems that many contact centre workers (administrative workers) are showing up in Finance and Insurance which makes sense. All three municipalities Moncton-Riverview-Dieppe have a much higher Finance and Insurance LQ than Saint John – and all well above the national average but not as much as Markham!

The full list is below. A few other surprises on this list and some obvious choices (e.g. Brampton).

If you want this kind of analysis at a deeper level, 4 digit NAICS – it is available at the urban centre level. I just don’t have the time today to look.

]]>http://davidwcampbell.com/2017/12/have-fun-with-numbers-everyone-can-play-along/feed/0Encouraging scale – towards global competitivenesshttp://davidwcampbell.com/2017/11/encouraging-scale-towards-global-competitiveness/
http://davidwcampbell.com/2017/11/encouraging-scale-towards-global-competitiveness/#commentsFri, 01 Dec 2017 01:05:45 +0000http://davidwcampbell.com/?p=7007Continue reading →]]>I have been thinking a lot lately about competitiveness – specifically how New Brunswick firms can compete in an increasingly globalized economy. Traditionally this was mostly a concern related to exporters but now even firms 100% focused on local markets have to compete with firms from around the globe for local markets. Twenty years ago if you wanted to buy business cards you went to the local printer. Now you order online from a firm based in Prague.

One of the ways our firms could drive competitiveness is by getting bigger – specifically through mergers and acquisitions. The old term – economies of scale – does apply up to a point.

Take the example of translation services. New Brunswick is an officially bilingual province. We pump out university graduates with translation degrees. We have a domestic market for translation worth $10s of millions per year. This should be a sector where we have a distinct competitive advantage, right?

There are 72 translation firms in New Brunswick showing up in Statistics Canada’s Canadian Business Patterns. 61 have no employees. 11 have employees but 10 of those have less than five employees. Only one hast 50-99 and none have more than 100 employees (as of December 2016).

Manitoba, a province of roughly the same size and a much smaller Francophone community, has three translation firms with between 5-10 employees, 2 between 20 and 49 employees and 1 with 50+ employees.

How is this possible? We could engage in a long conversation about the translation sector – about how it is comfortable serving the local market in New Brunswick and has no real interest in exporting – why would it when it is almost exclusively freelance translators with a full book of business? Why don’t we see a ‘Cooke Aquaculture’ of translation? Where is the Gerry Pond of translation? Where are the ADIs of translation?

If we were to do a full review, we would see that we have dozens of industries where there could be far more potential for exports but the firms are comfortable serving local markets and have little interest in scale.

So, in the words of Nikolay Chernyshevsky and his devotee VI Lenin, what is to be done?

Ideally for all of our export potential sectors we would have champions emerging – through M&A and just brute force of business development. The tiny firms remain and feed on the scraps but the sharks get out there and compete in the open water.

Of course, governments don’t particularly like sharks. They prefer minnows. We have much lower tax rates for minnows. The minute you get a little scale – bang – we double your tax rate. If you need $100,000 – ACOA, CBDC, ONB, NRC – all lined up with bags of cash. If you need $5 million – you had better be headquartered in Ontario.

What if we actually lowered corporate tax rate on firms as they grow? Sure, when the rise to the level of global, evil empire behemoth we can tax them to death but to help firms get in the $50 million – $100 million sales range why not lower their tax rate?

Is there something we can do with capital markets policy to encourage tie-ups? How about by bringing in more immigrant investment?

How about just ringing the fire alarm a bit? Our PR/GR marketing industry has essentially collapsed in the past 15 years. In some alternate universe we could have had a bunch of mid-sized creative shops doing cost competitive marketing out of New Brunswick. In, I stress, an alternate universe.

The other thing is basic math. A lot of NB business owners seem to think 100% of $100k profit is more than 25% of $2 million in profit. They aren’t giving away even a portion of control even if it leads to scale, competitiveness and growth.

I’ll leave you with this. There are lots of industries in New Brunswick that are quietly consolidating. National and international firms are coming in and scooping up insurance brokerages, funeral homes and optometrist firms, among others. These firms will benefit from scale but the ultimate decision making and control will be well beyond the borders of New Brunswick. It might be nice if a few New Brunswick firms build global scale – from here – headquartered here.

]]>http://davidwcampbell.com/2017/11/encouraging-scale-towards-global-competitiveness/feed/0New Brunswick: Don’t be distracted by Trumphttp://davidwcampbell.com/2017/11/new-brunswick-dont-be-distracted-by-trump/
http://davidwcampbell.com/2017/11/new-brunswick-dont-be-distracted-by-trump/#commentsSat, 18 Nov 2017 12:23:07 +0000http://davidwcampbell.com/?p=7001Continue reading →]]>I had hoped the mania over Donald Trump would die down over time. For more than a year after his election my Twitter and Facebook feeds (not so much LinkedIn) were so cluttered with fairly trivial Trump stories that I was forced for the first time to unfollow multiple people.

We need to understand how the U.S. president and his policies will impact Canada and New Brunswick, no question, but endless discussion and incredulity about his tweets and demeanor as well as White House intrigues are just distractions from the real issues we need to put in the window these days.

The Chief Economist at the EDC this week claims that New Brunswick is most ‘exposed!’ to Trump and NAFTA negotiations (his proxy is share of international merchandise exports) among the 10 provinces. I take issue with this on a number of fronts. Most of our merchandise exports to the U.S. are commodities such as motor vehicle gasoline, lobster and forest products. These are certainly part of the NAFTA conversation but a thoughtful analysis, I think , would find that provinces with manufactured exports – and complex interconnected supply chains are far more at risk – such as the auto manufacturing sector in southern Ontario. We certainly should be concerned about softwood lumber tariffs but the current high prices for wood mitigates this somewhat.

I am more worried about inter-provincial exports – and specifically services exports. EDC doesn’t really care about this because they focus on international exports and the other complication is the lag in inter-provincial export statistics.

For export-intensive sectors we can look at real GDP trends to get a sense of performance. New Brunswick’s ICT sector more than doubled its real GDP contribution between 1997 and 2011 – and has flatlined since (although the last two years have ticked up). Our architectural and engineering services GDP more than doubled between 1997 and 2009 and has dropped since. Our administrative services GDP increased by 174% between 1997 and 2009 and has dropped by 13% since.

The biggest threat to the New Brunswick economy may actually be helped by Trump. We need to see a substantial increase in the number of young people moving here to bulk up the labour market, fill current gaps and provide the horsepower (people power?) for future economic growth.

I’m not suggesting Trump and Trumpism doesn’t matter. I am suggesting we relegate most of it to the same part of our brain that likes dancing cats on YouTube or the latest Hollywood scandal – hopefully 2% of your time and Twitter feed.

Let’s spend most of our time – at least when it comes to economy matters – thinking about attracting talent, where the next round of ambitious entrepreneurs will come from, how we can boost our productivity as a province and other matters of importance.

I have historically be reluctant to weigh in on the issue of ‘bilingualism’ in New Brunswick. It can be a polarizing subject with some believing we haven’t done enough and others suggesting it has gone too far. But it’s an important issue so what the heck – I’ll throw out a few ideas.

I think it is time to have a public conversation about bilingualism. It’s been 50 years since New Brunswick started to take this issue seriously and there hasn’t been much public discussion about it for 20 years – since the CoR came and went.

The vision of bilingualism has several components:

1) To ensure there are ample French language places and spaces across the province. This point was lost on many English speaking New Brunswickers who thought bilingualism meant that everything should be bilingual – schools, hospitals, cultural spaces, etc. I had a long debate with a guy one time who said newspapers, radio and TV should be ‘bilingual’. While that, in abstract theory, has some salience, in reality that vision of bilingualism tends to revert to English. I have Francophone parents complaining their kids are tweeting in English, watching English TV and that English is spoken by many in the halls of high school. It’s important to have French language places and spaces. I think we have done a fairly good job at this but I think we should open up the conversation.

2) To ensure that people have access to public services (and hopefully even private sector services) in the language of their choice. This doesn’t mean everyone speaks French and English but as much as possible we should strive to make this a reality. There is no question we have made massive strides in this area.

3) To ensure as many as non-Francophones as possible have the opportunity to learn French – at least at a conversational level. On this point I think we have essentially failed. Decades of official bilingualism. Decades of putting upwards of 40% and more English kids through French Immersion and decades of government offering French language training to its workforce and the share of the population that indicates on the Census they speak both English and French has actually declined slightly over the last 15 years.

I’m not going to turn this into a long, winding discourse but the number of English only speakers in New Brunswick rose from 407,000 in 2011 to 421,000 in 2016 (this excludes all immigrants except those with a mother tongue English). Decades of promoting bilingualism and there are fewer English people who claim to have at least a working knowledge of French today than 15 years ago.

What’s going on? I have theories. I think our French Immersion graduates are more likely to leave New Brunswick for good after graduation than unilingual graduates. I know that sounds counter-intuitive because bilingualism is a real asset in New Brunswick. But, remember, it’s also an asset in Ontario – and, in fact, across the country.

But my biggest concern is that we have not promoted the use of French among English speakers – even those that speak French.

Why can’t UNB offer French language courses so that French Immersion graduates can keep up their French? If a UNB student took one or two courses a semester in French it would do wonders to keep up their bilingual skills. If it’s a question of French speaking profs – then do a deal with UdeM. I would say the same for NBCC/CCNB – Immersion graduates should be able to carry on developing their bilingualism beyond Grade 12.

Why not offer some kind of incentives to encourage English people to learn and use the French language? Even many new immigrants are given the choice – free English or free French lessons but not both.

Anyway, for this is the start of a conversation. What does bilingualism 2.0 look like? What does bilingualism 2.0 look like as we look to attract thousands of immigrants? What does it look like when the number of born-in-NB Francophones is in decline? Why are the great TV shows and documentaries published in French in New Brunswick not subtitled and promoted to Anglophone New Brunswick? We need to have separate French language spaces and places – I get that. But we need places and spaces where Anglophones can use their French language skills.

For me the bottom line is that bilingualism has been a success. The rise and success of Acadie should be celebrated. It’s a great story of a minority culture/language thriving. But we now have to think about the next level. We must get more Anglophones using their French. We should start to see French Immersion graduates rising to the heights in government and the private sector. We should be more creative in the promotion of French among Anglophones and immigrants (how about free and widely promoted French language training for all?). And even in the school system where I know that a number of kids drop out of French Immersion – there should be a ‘lite’ version such that every child going through the English language education system should come out speaking at least a conversational French.

And for Francophones, don’t automatically shift to English. My wife and kids all speak French. At restaurants and other venues they can respond to you in French.

]]>http://davidwcampbell.com/2017/11/inching-towards-the-bilingualism-2-0-conversation/feed/0Building out a cyber-security clusterhttp://davidwcampbell.com/2017/11/building-out-a-cyber-security-cluster/
http://davidwcampbell.com/2017/11/building-out-a-cyber-security-cluster/#commentsWed, 08 Nov 2017 23:12:31 +0000http://davidwcampbell.com/?p=6994Continue reading →]]>New Brunswick is trying to create a cybersecurity cluster. It has UNB researchers involved. It has several corporations involved – anchored by IBM/Q1 Labs. The government has set up CyberNB with a full team out there hustling to attract firm cybersecurity operations, IT firms, training, certification, etc.

I think there is another round of cybersecurity activity that would complement our existing strengths in business services/back office activity.

I talked recently about Facebook and its need to hire thousands of new staff to ensure its platform isn’t being used for nefarious activities. This same issue would apply to many online social media and news platforms.

The Economist had an excellent article this week about financial crimes/money laundering and the massive expansion in software that prowls the Internet seeking signs of illicit activity. This is complemented by a whole industry of firms such as Berlin Risk that make calls and use the old fashioned telephone to support the online activity. Sound familiar?

If NB is going to do cybersecurity – let’s go whole hog. Aligning IT, training, back office and customer interaction activity to become a world leader. We need to attract more immigrants. We could attract multilingual workers into the cluster bolstering our population with attractive jobs.

In the early 1990s NB was early into the contact centre game and turned it into one of the province’s largest export industries before the larger provinces even noticed. It is likely too late to do this with cyber as everyone is rushing in. While Ontario, etc. focuses on AI and algorithms we could focus on downstream content monitoring, interviewing, intel gathering, etc. I don’t know about you but I’d take 5,000 jobs paying $60k per year over the next 5-7 years.

]]>http://davidwcampbell.com/2017/11/building-out-a-cyber-security-cluster/feed/0A little good news, today (tip of the hat to Anne Murray)http://davidwcampbell.com/2017/11/a-little-good-news-today-tip-of-the-hat-to-anne-murray/
http://davidwcampbell.com/2017/11/a-little-good-news-today-tip-of-the-hat-to-anne-murray/#commentsWed, 08 Nov 2017 21:30:51 +0000http://davidwcampbell.com/?p=6989Continue reading →]]>Statistics Canada recently released its latest GDP and related figures for 2016 and New Brunswick has performed surprisingly well. Business capital spending is still very weak but household expenditures are up and overall GDP is up modestly over 2015. If you combine the GDP growth rates over the past two years – the provincial economy grew by 3.5% – above average among the 10 provinces.

Statistics Canada provides GDP growth by industry – and that shows some important trends. Again, combining the last two years of growth, transportation engineering construction saw a substantial boost in its GDP contribution (if you think there has been a lot of road construction recently – you are not wrong). The GDP growth rate from aquaculture and agriculture has been impressive and, give me a high five, the forestry sector seems to be strong again with sawmill and other wood product manufacturing GDP growth strong and even paper manufacturing GDP up 10% over two years. Let’s hope the U.S. duties don’t derail this success. But my favourite growth sector has been ICT which witnessed a 7% GDP growth over two years but the most important component computer systems design and related services is up 44%. Telecommunications GDP is down again by 1.5% following a long term trend downward.

There are some worrying sectors. R&D GDP growth has been modest. Accommodation services GDP – the proxy for tourism – is only up 0.5% over two years. The feds keep whittling away their defence spending in New Brunswick – the GDP contribution is down 15% since its high in 2010. The contact centre industry (admin services) GDP continues its slow burn but it is only down 10% over the last decade. This is better than many other provinces.

Our advertising and PR sector continues to collapse. There’s not much to say about this except it is disappointing.

The biggest concern is architectural, engineering and related services. The GDP contribution has dropped 13% in two years. The national and international firms that bought out NB firms – may be retrenching out of NB.

]]>http://davidwcampbell.com/2017/11/a-little-good-news-today-tip-of-the-hat-to-anne-murray/feed/1Putting the old fogies to work?http://davidwcampbell.com/2017/11/putting-the-old-fogies-to-work/
http://davidwcampbell.com/2017/11/putting-the-old-fogies-to-work/#commentsMon, 06 Nov 2017 10:20:48 +0000http://davidwcampbell.com/?p=6986Continue reading →]]>For some reason there has been an increase in media reporting on the plight of older Canadians/New Brunswickers in recent weeks. There are stories where the journalist (probably in his/her 20s) decries the fact that a 72 year old has to ‘work’ to survive. As I get closer to my dotage I think this narrative needs a rethink.

Back in the mid-1990s I had a colleague who was likely in her early 50s and she had one of those multi-year calendars on her wall with her retirement date red circles 4+ years hence. And she wasn’t shy to talk about how she was looking forward to retirement and the life of leisure it would afford.

My view then – and now – if you want a vacation take a vacation. Take a long vacation. But to be eager to retire and drop out of the workforce permanently – in your early 50s – is strange to me. The concept of retirement at 65 started to take serious root when people were living, to around 70 years old (actually earlier but some of that mortality was due to war). Now, people routinely live into their 80s and even 90s.

I know a couple who both were public servants and both retired in their mid 50s on one of those early retirement schemes to cut the short term deficit by ballooning long term taxpayer costs. They are both in their mid-70s now and going strong. It is highly likely they will have been drawing a pension longer than they worked (30ish years).

My father retired on the dot when he turned 65 because he wanted to make the job available for a young person.

We need to change the narrative here folks.

New Brunswick has the second lowest labour market participation rate among the 10 provinces among those 55+. This is not a trivial difference. If New Brunswick had PEI’s labour market participation rate there would be over 17,000 more people in the workforce across the province.

I hear many reasons for this:”it’s easier to live in NB just on your retirement income”, “EI props up older workers too”, “older New Brunswickers don’t want to work the jobs on offer”, “older New Brunswickers aren’t mobile – they can’t move out of their town because they can’t sell their house or because they have a spouse working or maybe they just prefer not to move” ,etc.

It’s no coincidence the provinces with the highest labour market participation rates among those 55+ are the provinces with large farming communities. For most farmers 65 is just another year.

I want to be clear that I don’t think we should force seniors to work through aggressive public policy. We live in a free society and people should be able to make choices about how much they want to work based on how much they want to earn as income.

The nub of the argument is simple. If we make public pensions lucrative enough that everyone can ‘retire’ in their late 50s or early 60s I think it would be a mistake. I hope to be working as long as I can. Hopefully as we age we can expand the definition of work – it doesn’t have to be an 8 hour day – every day. It can be part time, part year, gig-based, etc.

I’ll end this on one final point. We often times co-mingle the debate about poverty and older workers – I think to our detriment.

When I read about the 73 year old lady providing in-home care to a 90+ year old person I didn’t read that as a negative. My first thought was good for her. She’s earning extra money and helping out a truly older New Brunswicker who needs it.

If we (or the 20ish journalist) cast that story as a tragedy – I think it’s a mistake.

]]>http://davidwcampbell.com/2017/11/putting-the-old-fogies-to-work/feed/1Driving on the Don Mills Growth Wayhttp://davidwcampbell.com/2017/11/driving-on-the-don-mills-growth-way/
http://davidwcampbell.com/2017/11/driving-on-the-don-mills-growth-way/#commentsThu, 02 Nov 2017 15:54:13 +0000http://davidwcampbell.com/?p=6982Continue reading →]]>Someone recently posted the pollster Don Mills’ Seven Actions to Grow the Economy. Mills is primarily known as Atlantic Canada’s pollster as head of the firm Corporate Research Associates Inc. In recent years, he has redefined himself as the Jeremiah of Atlantic Canada’s future – woe are we if we don’t get serious about economic growth.

For the most part, I think Mills’ seven jeremiads could come right out of one of my presentations:

1. Retaining our youth

2. Educating the world

3. Building an entrepreneurial environment

4. Increasing the population

5. Re-balancing the workforce

6. Creating urban centered economic zones

7. Developing an export oriented economy

I, too, have been putting a greater focus on education these days. It’s a great way to attract people to the region to test drive living here and even if they leave after graduate – who cares? The region benefited from the high value economic activity while they were here.

I am a little more wary about this ‘retaining our youth’ idea because many people use it as a euphemism for restricting immigration. Besides, a lot of the most interesting people I know were born here but spent 5-10 years living elsewhere. If I had a genie with three wishes one of them would be that every New Brunswickers live for a while in another place – I think it would broaden our collective perspective.

The export-oriented economy is also key – because when you look closely at the data we actually don’t export much other than the big stuff – fish, lumber, paper, refined oil, etc. and there isn’t much growth in those areas. I would like to see a lot more services sector exports – professional services, business services, etc. We have some good examples already – engineering, contact centres, etc. – we should build on this.

Ultimately Mills’ challenge is that there are an increasing number of old timers driving the wrong way on the Don Mills Growth Way – I mean that literally and figuratively.

]]>http://davidwcampbell.com/2017/11/driving-on-the-don-mills-growth-way/feed/0The myth of the skilled immigrant (?) Leveling the playing fieldhttp://davidwcampbell.com/2017/10/the-myth-of-the-skilled-immigrant-leveling-the-playing-field/
http://davidwcampbell.com/2017/10/the-myth-of-the-skilled-immigrant-leveling-the-playing-field/#commentsSat, 28 Oct 2017 12:09:30 +0000http://davidwcampbell.com/?p=6977Continue reading →]]>The new Census figures on immigration out this week were not that surprising. It confirms what we have been seeing – that New Brunswick’s urban centres are attracting more immigrants but having some trouble retaining them.

The more interesting data will come in late November (hopefully) when we see immigration by industry and occupation. We are told that Canada only focuses on high skilled immigrants and that the points system favours those with a lot of education and skills.

Of course this flies in the face of actual data.

Take a look at the following chart from the 2011 National Household Survey. This shows the ratio of immigrant workers to non-immigrant workers in Toronto (and Moncton as well). You will see that Toronto’s highest concentration of immigrant workers -relative to non-immigrant workers – is the the lower skilled and mostly lower wage industries such as transportation and warehousing, administrative services, and other services. There is a very high concentration of immigrant workers in Toronto’s manufacturing sector – but that sector is not necessarily high wage – the average annual salary in Ontario’s clothing manufacturing sector is $34,000, food manufacturing $40ish, metal manufacturing around $55k (in 2016).

The point – that I have been making for a long time now – is that the larger urban centres have been attracting immigrant workers into sectors where they are needed and smaller urban centres are more constrained to the concept of the ‘high skilled’ immigrant.

I’m hoping the 2016 immigrant data will show we are flowing more into the sectors where workers are needed in New Brunswick.

I’m a big fan of Herb Emery, the UNB economics prof – but I think – based on the article in the newspaper – he may be sending the wrong message. His report concludes that policies to attract more immigrants won’t cause the growth of the economy. His report is actually based on a pretty discrete chunk of data. It is an important part of the conversation but I have a few counterpoints.

1. How would he explain the fact Manitoba has the fastest GDP growth among the 10 provinces in recent years – and a massive increase in immigration? How would he explain that the head of immigration said that a large share of these immigrants are going into the province’s business services sector – the only province with overall growth in that sector?

2. How would he explain the fact that the largest urban centres in Canada right now are driving employment growth across the country -and still attracting the lion’s share of immigrants?

To suggest that causality runs only one way is mistaken. Export-based jobs will attract migrants leading to increased local demand and more jobs. We agree. But tightening the labour market to the point that employers decide not to expand in your community is an increasing risk.

I guess the common ground here is that I am not advocating we boost immigration without a plan. As I have outlined elsewhere we need to fill empty jobs first – particularly in export-based industries. We need a more intelligent approach to immigrant investment. We should boost immigrant numbers in our PSE that align with our growth sectors such as cybersecurity and insurance. This will send a strong signal to the national and international firms already here that the talent pipeline is expanding.

But I also maintain that immigrants themselves create demand. Depending on the economy, 70% of all jobs are based on local demand. If the population or overall wage growth is not strong – this dampens local demand.

It’s seems like we are left fighting the same old, tired battles we have been fighting for years. I’d rather flood New Brunswick with immigrants and just see what happens rather than constrain immigrants and watch the provincial economy slowly dry up. The worst case many of these immigrants move on to Toronto. If so, who cares? The best case many of them stay and help us build our economy.

]]>http://davidwcampbell.com/2017/10/the-myth-of-the-skilled-immigrant-leveling-the-playing-field/feed/2Making sure Taintville doesn’t fall through the crackshttp://davidwcampbell.com/2017/10/making-sure-taintville-doesnt-fall-through-the-cracks/
http://davidwcampbell.com/2017/10/making-sure-taintville-doesnt-fall-through-the-cracks/#commentsMon, 23 Oct 2017 11:53:56 +0000http://davidwcampbell.com/?p=6972Continue reading →]]>There is a place in the Miramichi area known as Taintville. Someone from the area told me it got its name because it’aint Newcastle and it’aint Chatham (anyone knowing the real story can send me a note). It seems to me that ‘Taintville’ stands as a good metaphor for communities that have lost or are losing their economic reason to exist.

If you aint’ Newcastle and you ain’t Chatham what are you?

In my opinion every village, town, city and urban centre needs an economic rationale for its existence. Originally, every place was settled for an economic reason. Farmers, fishers and forest industry workers needed a central place to conduct commerce and access services. Urban centres because centres for public services – education, health care, etc. For those with growing populations or the ability to attract population from outlying areas, urban centres became places where entrepreneurs set up manufacturing activity. If the community was centrally located in a wider geographic area, they became higher order centres for commerce and services.

Nowadays we have the potential for many Taintvilles across Atlantic Canada and the country as a whole. These are communities for which the drivers of the economy over 10,20,30, 40 years or more have shifted significantly and they are not finding their role circa 2017 and beyond.

They used to be able to rely on a steady stream of young people entering the workforce. For decades there was a surplus of young people – and many of them left to find work. Now there are fewer and many of those that come out of the education system do not want the jobs on offer so they leave for greener pastures. Partly this misalignment in the labour market has been manufactured by public policy. I recently looked at the available jobs in a small urban centre and only 8% of the jobs on offer required university and 20% a college diploma. The other 72% required neither. Yet we highly encourage our young people to pursue university or college and then are shocked, shocked, when they leave the community or region after graduation.

I’m not suggesting we discourage young people from pursuing post-secondary education – far from it – but the people that used to work the 72% of jobs – second income earners, students, newcomers, etc. are not as plentiful as they once were. If the labour market cannot supply needs across the spectrum – all jobs that absolutely don’t have to be in the community are at risk of disappearing – moving to communities where there is available workers – communities in Canada or around the world.

Every community from Edmundston to Shippigan to Sackville and St. Stephen in New Brunswick needs to think about its distinct economic role and pursue policies, infrastructure and other efforts to support that distinct role. Are you a bedroom community that provides workers to larger urban centres? Are you a regional services centre? Do you have existing export-based industries that are losing their underlying reason to be in your community? Have you relied on local entrepreneurs to drive economic growth? If so, where is the next generation coming from?

Are there one or two key industries that drive your economy – agriculture, fishing, tourism, IT, education? Will they continue to do so into the future or are they slipping away?

And if you are inclined to believe that becoming a retirement community is your distinct economic role, I urge you to reconsider. Among Ontario’s 44 large, medium and small urban centres guess which one has the lowest median income. Elliot Lake.

Lots of people are retiring and that number is set to grow significantly. Communities that are great places to retire and offer services and support to people for the 20 and now even 30 or more years after retirement – will benefit. But there are many reasons why that can’t be the primary economic role.

If your community is starting to look like Taintville, it’s time roll up your sleeves and get to work.

]]>http://davidwcampbell.com/2017/10/making-sure-taintville-doesnt-fall-through-the-cracks/feed/2How’s she goin’, boys? In the Miramichi, she’s goin’ pretty good these dayshttp://davidwcampbell.com/2017/10/hows-she-goin-boys-in-the-miramichi-shes-goin-pretty-good-these-days/
http://davidwcampbell.com/2017/10/hows-she-goin-boys-in-the-miramichi-shes-goin-pretty-good-these-days/#commentsFri, 20 Oct 2017 04:17:45 +0000http://davidwcampbell.com/?p=6967Continue reading →]]>In this sense, of course, ‘she’ is gender neutral. My father, sixth generation Miramichier, sidled up to my father-in-law one time (born and lives in Brazil and speaks a little English) and asked him “how’s she goin’?”. My father-in-law asked me later who ‘she’ was and why was she going anywhere?

Anyway, no matter how you say it things are going pretty well in the Miramichi these days at least measured by the increase in the number of people working and average income levels. According to Statistics Canada data – using CRA tax filer data – after steady decline in 2012 there was a big jump in the number of people declaring employment income and now there are over 1,800 more people working in 2015 than in 2011 (flat since 2012). Don’t forget the number of employment income earners across the province has declined over the same period.

And these are not low paying jobs, the number of people in the ‘Chi reporting at least $50,000 increased by 1,850 between 2011 and 2015 – more than double the growth rate across the province.

And, you might recall from the Census data, the Miramichi had the largest rise in average household income.

What’s going on in the ‘chi?

We will get much better data on this in November when the full Census data is finally released.

]]>http://davidwcampbell.com/2017/10/hows-she-goin-boys-in-the-miramichi-shes-goin-pretty-good-these-days/feed/1McKenna 20 years later: Learning from his legacyhttp://davidwcampbell.com/2017/10/on-mckenna-and-moving-forward/
http://davidwcampbell.com/2017/10/on-mckenna-and-moving-forward/#commentsSat, 14 Oct 2017 15:51:26 +0000http://davidwcampbell.com/?p=6964Continue reading →]]>In recent weeks I have been working on a project that has led me to chat with a bunch of business and government folk that were prominent in 1980s/1990s New Brunswick. In all cases the conversation eventually got around to Frank McKenna. It always does. Thirty years ago this month, Frank was elected as Premier and 20 years ago yesterday he stepped down as Premier – keeping a promise not to stay in power more than 10 years.

I have written a lot over the years about McKenna. He reined in public spending. He championed New Brunswick across Canada and beyond. Who can forget the stories of taxi cab drivers in Toronto invoking his name or of him hustling CEOs on Team Canada trade missions much to the consternation of other Premiers. In general, he spent a lot of time trying to convince New Brunswickers that we were just as good as any other Canadian.

In many ways his post-Premier career has been even more influential. He hobnobs with Bill Clinton and other global leaders. He is highly visible on many national issues. His perch at the TD Bank has provided a platform to continue championing New Brunswick.

What is his legacy? It’s hard to say. The fact that Mckenna is a top 100 baby name in Canada for girls may or may not have anything to do with the guy called “the tiny, perfect Premier” back in the day.

There are certainly few people in New Brunswick who were adults in the 1980s and 1990s who don’t have a developed opinion about him one way or the other – I would say mostly a good opinion although I run into people who are still bitter about amalgamations, forced RCMP, etc. and even some who continue to believe he was too focused on attracting industry and not enough on helping poor, old NB small businesses.

My only beef with McKenna – stated at the time and many times since – was that he didn’t leave much infrastructure behind when he left. McKennaism wasn’t embedded in government – not political or bureaucratic. Bernard Lord actually ran on a platform that repudiated McKenna’s economic development program talking about a “made in New Brunswick” solution instead (ironically, of course, Lord benefited from even more call centre jobs than McKenna as most firms attracted here in the mid-late 1990s only reached full expansion by the early 2000s).

This is the challenge with the cult of personality. It can be a wonderful tool for change at a moment in time but can lead to an ongoing overhang – every Premier since McKenna has been compared to him – and not favourably. One Premier told me he was dogged by McKenna’s shadow in office. Fair enough. U.S. Presidents get the same treatment. All Republican Presidents get compared to the Gipper.

We should learn the lessons of Frank McKenna: 1) There is value in having a determined, charismatic leader during times when big changes are needed; 2) New Brunswickers can and should be #NBProud; 3) New Brunswickers can compete and win when it comes to attracting global firms; 4) true political success happens when change is embedded into the system – which did not happen with McKenna.

]]>http://davidwcampbell.com/2017/10/on-mckenna-and-moving-forward/feed/2If we want to be globally competitive, we have to take that term seriouslyhttp://davidwcampbell.com/2017/10/if-we-want-to-be-globally-competitive-we-have-to-take-that-term-seriously/
http://davidwcampbell.com/2017/10/if-we-want-to-be-globally-competitive-we-have-to-take-that-term-seriously/#commentsSat, 14 Oct 2017 13:50:01 +0000http://davidwcampbell.com/?p=6960Continue reading →]]>The City of Saint John recently released a study they had completed looking at the property tax system that makes some interesting recommendations most notable for a significant rise in taxation of heavy industry, the assessment of equipment and machinery as part of the overall property tax assessment and an increase in municipal control over rate setting. If we are going to have these debates we need to do so armed with good data.

My big theme these days is that New Brunswick is far more exposed to the global economy than ever before. It competes with other jurisdictions with the export of our products and services, on the attraction of talent (everything from home care workers through to Phds), for federal government and private sector funding, for business investment, and for general influence over policies that can have profound impact on us.

In this environment it becomes incredibly important for us to know who our competition is and what set of policies and efforts are required to ensure we are competitive?

I am particularly concerned with smaller urban centres across Canada. There is a growing body of data that suggests that many of them are at high risk over the next 10-20 years of slow and even negative growth. Across Canada, the largest urban centres are growing employment at a rate 2.7 times faster than urban centres with between 50,000 and 99,999 in their employed workforce and 14 times faster than the smallest urban centres (with under 50,000 workers).Employment growth between 2010-2015 by size of employed workforce All urban centres across Canada (CMA/CA)
Source: Statistics Canada CANSIM Table 111-0007.

First, this is a fairly small timeframe – 2010-2015 – doesn’t mean we can project out for the next 20. But it is a long enough time to allow us to speculate. If you look at the data closer you see that many mid-sized urban centres in the orbit of the largest urban centres (such as Guelph, Waterloo, Drummondville, etc.) are doing quite well as are those that have a core, high value geography-specific industry (such as Estevan, Okotoks and Camrose) but urban centres that don’t fall into these two categories are struggling a lot more.

Why? There are few possibilities. First, historically these smaller urban centres relied almost exclusively on natural population growth and intraprovincial migration – very little immigration – to grow (BTW this is more of an eastern Canada phenomenon). Now those two sources of population growth are drying up and they have to compete with the largest urban centres to attract immigrants – a much harder proposition. The tightening labour markets are leading to the loss of industries that don’t “have to be there” for lack of a technical term. Eventually it could lead to much greater decline.

Secondly, these communities are facing even more competition as discussed above. I could list off for you more than a dozen firms in New Brunswick that have expanded manufacturing and other operations outside the province in just the past few years because in their calculus it made more sense to expand out there than back home. I get that and government shouldn’t try to brow beat firms into bad business decisions.

But, we need investment here. According to KPMG’s annual report on competitiveness around the world, New Brunswick firms already pay high property taxes (see example below). Now, there are lots of debating points here: 1) property taxes are not a huge part of overall operating costs; 2) this particular metal fab firm may not be ‘heavy’ industry as defined in the new report; 3) If Saint John had the flexibility of U.S. jurisdictions it could selectively reduce taxes for ‘strategic’ industries, etc. etc. etc. So, I understand the debate.

Let’s just make sure that when governments make decisions – they have the best data to back up those decisions – and that data should be focused on our competitiveness as a jurisdiction. And not just for business. We’re going to need to attract 150,000 people to our shores over the next 15 years (Campbell forecast) – they will want to come and stay in communities that are ‘competitive’ – taxes, quality of life, quality of schools, green spaces, etc.

]]>http://davidwcampbell.com/2017/10/if-we-want-to-be-globally-competitive-we-have-to-take-that-term-seriously/feed/1Chasing Amazon? May I suggest you consider Facebook instead?http://davidwcampbell.com/2017/10/chasing-amazon-may-i-suggest-you-consider-facebook-instead/
http://davidwcampbell.com/2017/10/chasing-amazon-may-i-suggest-you-consider-facebook-instead/#commentsSat, 07 Oct 2017 10:54:26 +0000http://davidwcampbell.com/?p=6954Continue reading →]]>The competition to attract Amazon H2 and its 50,000 jobs is reaching a fevered pitch. Some experts have suggested the total value of the incentive deal will reach $5 billion ($100k per job) or more. Amazon has even stated that it expects a massive incentive deal. Some jurisdictions will undoubtedly waive all corporate taxes – income, sales, property, etc. and also offer some kind of personal income tax rebate (i.e. a grant to the firm based on how much personal income tax is expected to be generated).

As I have said before this amounts to lottery-mania. All the Governor ‘war rooms’ established and all the gimmicks (remember the town that renamed itself Google on a temporary basis to attract that firm?) will end up being a fun distraction (and a costly one).

May I suggest, as an alternative, that you consider attracting Facebook instead.

Facebook has already announced it will be hiring several thousand new staff to monitor content and one expert suggested this would only be a drop in the bucket – he indicated 10,000 or more may end up being needed around the world to ensure all that fake news you click on or like is put into context or deleted outright (did Bill Murray actually benefit from New Brunswick’s legendary kindness?).

New Brunswick has a cybersecurity cluster. It has a long history with back office and customer interaction centres. It is rapidly boosting its immigration to ensure a future pipeline of workers. It is almost a certainty that a 1,000 person Facebook cybersecurity/content centre would thrive here. As a cherry on top the NBCC and CCNB would be thrilled to churn through hundreds of graduates from a customized content moderation/security training program.

After all, like the lottery, winning $100 million would be nice but the free tickets, $10 and $100 prizes are in large part what keeps us coming back for more.

One of the reasons why the New Brunswick economy has been so draggy in recent years has been the lack of big scale capital expenditures. For the better part of 30 years, starting with the Confederation Bridge, at any given time New Brunswick could count on having several of these large scale projects going on at any given time. We had pipeline construction, new energy infrastructure, Lepreau refurbishment, a $2.4 billion new potash mine, a new LNG import terminal, wind energy investment, etc. In the past few years, however we have had very little of that big scale investment.

If you back out public sector capital spending (which is down but has remained quite high), public sector investment in non-residential tangible assets averaged well over $3.2 billion/year. Now it is down to below $2.2 billion/year. That may not seem like much to some folks but if you suck out $1 billion/year in CAPEX it hurts the economy now and dampens it for the future.

The following table shows this CAPEX trends but expressed as a share of national capital expenditures. For most of the past decade, capital spending in the private sector in New Brunswick averaged more than $18 out of every $1,000 spent across Canada. That is now down by 41% to only $10.67 per $1000 spent across Canada. Public sector spending is still roughly at par with the rest of the country as a share of GDP (NB is roughly 2.1% or so of national GDP or similar to $20.47 for those of you who can’t follow my confusing math). Private sector CAPEX, by contrast, is half what it should be.

And this matters for more than one reason. First you lose the economic impact of the investment itself (construction) but second most of these large projects generate an ongoing stream of economic activity as the asset is amortized over time.

This is what I tell mayors in New Brunswick. There are two kinds of building permits. The first kind is reacting to what is going on in the economy (think residential) and the second kind is driving new economic growth (think a new manufacturing facility). You can build all the new houses you want but it won’t lead to the creation of a new manufacturing facility but if you build a new manufacturing facility it will create the demand for new housing.

So, if New Brunswick had the same level of annual capital expenditures since 2010 as we saw the previous decade There would be nearly $8 billion more deployed right now across the NB economy. That economic boost would have been significant.

As we look to the future we need to encourage more investment. The loss of Energy East is just another example of a project that would have provided some of that needed new CAPEX.

]]>http://davidwcampbell.com/2017/10/we-need-more-investment-a-lament-for-energy-east/feed/0A possible tax reform solution: Tighten the rules around equivalencyhttp://davidwcampbell.com/2017/10/a-possible-tax-reform-solution-tighten-the-rules-around-equivalency/
http://davidwcampbell.com/2017/10/a-possible-tax-reform-solution-tighten-the-rules-around-equivalency/#commentsTue, 03 Oct 2017 16:24:28 +0000http://davidwcampbell.com/?p=6948Continue reading →]]>From the start the federal government has couched the issue of tax reform around fairness. Why should two people earning the same income and doing the same work pay different levels of tax just because one uses a corporation to receive and distribute income?

If this is really the issue, then the solution should be to tighten the CRA rules around equivalency. If you have two lawyers earning the same income, doing the same work for the same ‘client’ then maybe they should pay the same taxes. The problem is that if you have one lawyer that earns $150k working for a government agency and another earning $150k working for herself – with no guaranteed income and facing costs not faced by the employee – there is no way they can be considered equivalent.

As for the active vs. passive income argument – small business owners should be given fairly wide latitude to store up income to be spent in the future. And the sprinkling thing? There are already rules around this. Tighten them up a bit respecting that spouses do play an important role in most small businesses.

At the end of the day I believe there is a solution here that would make things more fair without taking away the risk premium that we need to encourage entrepreneurship.

]]>http://davidwcampbell.com/2017/10/a-possible-tax-reform-solution-tighten-the-rules-around-equivalency/feed/0The Amazon headquarters sweepstakes: It’s fun to play!http://davidwcampbell.com/2017/10/the-amazon-headquarters-sweepstakes-its-fun-to-play/
http://davidwcampbell.com/2017/10/the-amazon-headquarters-sweepstakes-its-fun-to-play/#commentsTue, 03 Oct 2017 09:35:11 +0000http://davidwcampbell.com/?p=6946Continue reading →]]>Why would someone buy lottery tickets every week, week in, week out for years – even decades? They know intuitively the chance of them winning the big one is infinitesimal but they get out there every week. In fact, the larger the jackpot -and hence the more unlikely the chance of winning – the more people who play.

If you ask them they will say: It’s fun to play.

The little thrill every week from seeing if your string of numbers matches the winner is worth the investment.

The same process is playing out with the Amazon HQ that has been dangled around. Never mind that some suspect that Amazon actually has already selected its city and is trolling around to get a better incentives deal. Even if it was an actual competition (which it probably is) the chances that your community will win the big one is infinitesimal.

Google the story. You will find City Councillors and mayors from Biloxi to Halifax to Vancouver all eager to serve up a bid. Many, like Vancouver, are hiring whizzy firms like Deloitte to craft the value proposition. Paying tens of thousands of dollars for a chance at billions? Why not?

It’s fun to play.

For a few weeks, economic development is front and centre. Local newspapers are covering the story of the Halifax bid (actually the Canadian Press). Detroit thinks Amazon will restore its former glory. Windsor, Ontario wants in – talking a joint pitch with Detroit. The mayor of Chicago wrote an op-ed stating why it should be in the Windy City. Even Moncton should bid – jointly – a virtual HQ – everyone wins!

Cynics might say this is all just a waste of time and resources. Over a two month period likely millions of dollars – maybe tens of millions – will be spent – time and effort on bids. Why not focus your resources where you have a better chance of success?

I am not as cynical. Having been involved in dozens of big ‘pitches’ over the years (including writing a proposal to attract a Mercedes manufacturing plant in the early 1990s), I believe they have the side effect of helping communities hone their value proposition for investment and uncover gaps that are holding back growth. This intelligence – gleaned while buying the lottery tickets – helps down the line.

]]>http://davidwcampbell.com/2017/10/the-amazon-headquarters-sweepstakes-its-fun-to-play/feed/0The power of giving your time to causes that matterhttp://davidwcampbell.com/2017/10/the-power-of-giving-your-time-to-causes-that-matter/
http://davidwcampbell.com/2017/10/the-power-of-giving-your-time-to-causes-that-matter/#commentsTue, 03 Oct 2017 00:41:48 +0000http://davidwcampbell.com/?p=6941Continue reading →]]>Maybe it’s because I studied under a bunch of Libertarian professors in university but I have never been comfortable with the idea that government should have the exclusive right to try and solve all of society’s challenges. A couple of years ago a friend of mine had occasion to see the IWK hospital up close and personal as his child required the specialized services. He really appreciated how they helped his child and decided to get involved in fundraising for the organization. He came up to me and another guy and asked about our interest in supporting the cause. The other guy quickly stated “that’s why I pay taxes” and refused to offer any support.

I believe we rob ourselves of something very important when we outsource all of the good stuff in the local community to the ‘government’. My daughter recently did a video documentary about several charitable organizations in Moncton and I drove her around while she taped interviews and got footage. I was reminded just how many volunteer-led organizations there are and how important they are to the well functioning of Canadian society.

The data from Statistics Canada has not been updated since 2013 but the figures that year were not particularly encouraging. New Brunswick had the second lowest volunteering rate in the country (only ahead of Quebec) and the rate was down significantly from the past two survey periods.

A closer look at the data by age group finds that 25-44 year olds in New Brunswick volunteer considerably less than their counterparts across the country (as measured by the share who volunteer) and, strangely, those aged 55 to 64 – among whom only about 1/3 actually volunteer compared to 56% among the 15-24 age group.

As New Brunswickers get older this should open up a golden opportunity for us to give back. We are more affluent now than ever before. We will live longer than at any time in history. It can’t all be about eating, golf, TV, easy chairs, vacations and drinking coffee at Starbucks. Only one in three 55-64 year olds do any kind of volunteering at all in New Brunswick? We can and must do better.

In the modern world we try to achieve meaning in many different ways. We travel the world and expose ourselves to different experiences. Hiking in Tibet or laying on the beach in Cuba may give you a thrill but you might also find the meaning you are looking for right here at home volunteering at a soup kitchen, helping a child learn to read, coaching youth sports, teaching Sunday School or by helping an immigrant family adapt to their new country.

Why does a blogger about economic development care about volunteering? Glad you asked. We need to grow our economy in the coming years. That will require more young people to stay and build their careers here and it will require the attraction of tens of thousands of young people and families from abroad. In addition, we have many challenges – on the ground, right now like literacy, obesity, child poverty, etc. We need mentors, we need teachers, we need charitable givers, we need those willing to give a helping hand. It makes society stronger and strengthens the conditions for economic growth.

]]>http://davidwcampbell.com/2017/10/the-power-of-giving-your-time-to-causes-that-matter/feed/0Cry havoc, and let slip the dogs of entrepreneurship!http://davidwcampbell.com/2017/09/cry-havoc-and-let-slip-the-dogs-of-entrepreneurship/
http://davidwcampbell.com/2017/09/cry-havoc-and-let-slip-the-dogs-of-entrepreneurship/#commentsSat, 23 Sep 2017 14:15:08 +0000http://davidwcampbell.com/?p=6934Continue reading →]]>I had a conversation recently with someone who thought we could learn from China as with think about economic development in Atlantic Canada. He was an admirer of all the state intervention, planning, the 20-year plans to be the world leader in shipbuilding, green energy, etc. etc. etc. When I look at China I have a different view.

My perspective is captured nicely in an Economist article this week (behind a paywall) that discusses in detail the massive rise in entrepreneurship in China over the past decade. There are more unicorns in China (startups worth $1B or more) than in the United States. Chinese entrepreneurs are disrupting almost every sector of the economy: transportation, finance, health care – they have leapfrogged North America in the development of data-driven health care solutions.

While we could debate that all day I think most people would agree that entrepreneurship is key – both inside established firms and the new start-up variety. And, I think there is a growing pile of data to suggest that New Brunswick in particular is not seeing that kind of ambitious, disruptive entrepreneurship. Don’t get me wrong, we have some examples – but I am talking about on a scale that moves the needle. And not just ‘tech’ startups – entrepreneurship and disruption should occur across a healthy and vibrant economy from construction to personal care shops.

Take employment growth in small firms as one proxy. Across Canada there has been healthy growth over the past decade in firms with less than 50 employees. In New Brunswick, employment in small firms is down. The spread between the national growth and the New Brunswick decline is substantial.

While this is not a perfect measure it is an important one. If the province had hundreds of new firms starting up over the past decade driving innovation, new technology and business process improvement, we would be seeing growth in the number of small firms and their employment.

Now, I realize some of you will correlate the decline in small business employment to the stagnant economy and population. That is true but I would argue it is getting increasingly hard to tease out causality here.

In the end I would like to see a new generation of entrepreneurs emerging in New Brunswick that want to shake up the status quo across all industries.

I’d like established firms to rediscover their entrepreneurial verve. Many have gone for years floating on comfortable margins, building up a little wealth and they have lost that lovin’ feeling. Do you remember what it was like to finish up a crisis planning meeting at 1:30 am?

The other thing about the Chinese is that they have global ambitions. Just about all the firms discussed in the Economist article are already buying up firms across North America and Europe. They might just be coming for you.

]]>http://davidwcampbell.com/2017/09/cry-havoc-and-let-slip-the-dogs-of-entrepreneurship/feed/1Think Big. It is time for a little more ambition across the Maritimeshttp://davidwcampbell.com/2017/09/think-big-it-is-time-for-a-little-more-ambition-across-the-maritimes/
http://davidwcampbell.com/2017/09/think-big-it-is-time-for-a-little-more-ambition-across-the-maritimes/#commentsMon, 18 Sep 2017 11:04:34 +0000http://davidwcampbell.com/?p=6926Continue reading →]]>You might have heard that Amazon is shopping around a 50,000 person head office to U.S. and Canadian jurisdictions with one million or more in population. It is easily the largest single firm economic development project shopped around like this in the past decade – maybe in my lifetime. Conservatively those 50,000 jobs will boost employment in other sectors by at least double that amount and one economist said it would boost state-wide employment by 5x. I’ve always been a little skeptical of those massive multipliers not least become some of the new growth will likely displace existing economic activity.

Anyway it got minds buzzing a bit even here in Atlantic Canada. I received multiple, and fairly serious, emails asking me if there was any possible chance? Nope. In fact, my suspicion, echoed in the Economist magazine this week, is that Amazon already knows where it wants to go and is using this whole city bidding war to boost the eventual incentives it will get in the city that it already knows it will be setting up in. But I can be cynical at times.

The whole ordeal prompted an overly excited columnist at the Times & Transcript to pen a surreal column about the entire Maritime Provinces putting in a joint bit to carve up the head office from Saint John to Lunenburg linked together by a high speed train moved along by pixies sprinkling their dust.

Pixie dust aside, I do believe a project like this – if phased in over 5-7 years could be easily done in a Halifax or maybe even a New Brunswick city as people will move to work in an Amazon head office. When RIM (remember RIM?) announced it would expanding in Halifax it asked employees in Ontario if any would like to relocate and as it was told to me they were inundated with requests. But no big firm is going to take a flyer on a small city and, BTW, no small city or province can stump up the billions of dollars that Amazon will receive to locate in Toronto or Atlanta.

But it does provide an opportunity to talk once again about ambition.

In the 1940s my grandmother told her sons they would have to leave the Miramichi if they wanted to be successful. In the early 1990s I was told there is no way any auto manufacturer would ever want to set up in New Brunswick even as they set up in droves in the most podunk off-the-beaten track places in the southern United States. Even the big firms that set up here got the usual “after the subsidies dry up they will be gone”. FYI – they are almost all still here – UPS, ExxonMobil, Air Canada, Fairmont – all the big firms that set up in the early to mid 1990s.

In fact, I have heard this refrain my whole career. Why would anyone want to move to New Brunswick? Why would an immigrant want to settle here? They will just get their PR and leave to find greener pastures. Why would a national or international firm set up here? There must be some backroom deal, some neutered labour laws – something or else they would not be here. Why would an ambitious entrepreneur set up here? They’d be better off just moving to San Jose or Waterloo.

Have a little ambition, folks. Flip the question. Why wouldn’t they want to locate here? Look at this place – 10 minute daily commutes, buy a big house and a cottage on the water here for what you pay for a small house in Toronto. Be able to pick up the phone and talk to a mayor or business leader – try that in Chicago.

Our negativity about ourselves is part of the problem – it is self-reinforcing. It’s like sharks smelling blood in the water. If you don’t even believe in your community why would anyone else?

]]>http://davidwcampbell.com/2017/09/think-big-it-is-time-for-a-little-more-ambition-across-the-maritimes/feed/0Pitchforks protecting Plutocrats? Don’t mess with the entrepreneurial risk premium.http://davidwcampbell.com/2017/09/pitchforks-protecting-plutocrats-dont-mess-with-the-entrepreneurial-risk-premium/
http://davidwcampbell.com/2017/09/pitchforks-protecting-plutocrats-dont-mess-with-the-entrepreneurial-risk-premium/#commentsSat, 16 Sep 2017 11:40:11 +0000http://davidwcampbell.com/?p=6919Continue reading →]]>I’m fascinated by how the proposed federal tax changes meant to “level the playing field” and “ensure that the richest 1% of Canadians pay their fair share of taxes” is playing out in the media and in the public at large.

I am not exaggerating when I say that 95% of all the articles and commentaries on Bill Morneau’s tax crusade have been negative – not just in the National Post – in every newspaper and media source I have tracked on this. And, further, all the comments on LinkedIn and Twitter have been overwhelmingly negative. Almost all the economists quoted have been against the changes and the few that were positive seemed to qualify their support – there has hardly been a full-throated supporter other than Morneau himself. Even the general public on my social media feeds – not business owners or wealthy people – are posting negative articles and commentary.

I’m actually not going to speak to the merits or not of these tax changes. I only have one small contribution to the debate.

Don’t mess with the entrepreneurial risk premium. We need public policy to ensure there are still lots of folks willing to plunge in and take the risk of becoming an entrepreneur.

As I understand it, Morneau wants to tax surplus income that is either left in professional corporations to avoid paying taxes or sprinkled around to family members who didn’t really earn it to lower the tax liability. The government uses the example of the doctor who accumulates hundreds of thousands of dollars – even several million – in the professional corporation without paying much tax on it (or sprinkles it around) and compares that doctor to another who just draws a salary from the local health authority. It’s ‘unfair’ that the latter will pay an effective tax rate substantially higher than the former.

The opponents to the tax changes say that potentially the vast majority of small businesses will get caught up in the new tax regime even those earning $70,000 per year. Further, they suggest it will be almost impossible to truly determine ‘active’ versus ‘passive’ income. Take the example of a small business owner who has accumulated $500,000 cash on her company balance sheet over a 10 year period. Is she hoarding that income to avoid paying taxes or saving up for a big expansion? How can you tell? What rules could you put in place to clearly differentiate between active and passive income?

As for income splitting, there should be some rules around this but again it would be hard to say that farmer Jane’s husband and kids were not ‘earning’ the money they were ‘sprinkled’.

Without being a tax expert – by any stretch – I suspect the vast majority of small businesses will not be impacted by the tax changes. Small amounts of sprinkling will likely be permissible and leaving profits in a small businesses for any kind of legitimate business reason – expansion, risk of a dry spell, etc. will be left alone. They keep using the example of that poor old doctor – a radiologist say – that makes $1 million and leaves $700,000 in his firm without paying tax.

I’ll make a quick point before coming back to my main theme. If a 20/20 rifle would suffice don’t use a bazooka. I’ve seen this a lot in government recently. They want to target a specific audience for some reason but make changes that impact everyone. If you want to address what you perceived to be a highly specific issue – don’t cast a wide net. If there is a very small cohort of people that are truly using corporate status in a way that you deem inappropriate – have that debate.

Don’t remove the entrepreneurial risk premium.

You want people that own small businesses to take entrepreneurial risk. In New Brunswick, there are something like 25,000 business establishments with employees. That is one business owner for every 30 people living in the province. There are thousands more that are owner-operators – electricians, plumbers, consultants, etc. that have no employees. These businesses are essential to the well functioning of an economy. They serve niches that big firms can’t or won’t. They keep big firms from bullying local markets by offering alternatives. The range of small businesses – niche retailers, restaurants, franchise holders, etc. is impressive and should be encouraged. Our economy is stronger and our quality of life is enhanced by having broad choices – choices made possible by all the small businesses.

Plus as I have pointed out elsewhere we need some of those small businesses to breakout and become large – serving national and international markets and generating export revenue. Somewhere in Canada there was a single Hakim Optical. Now Hakim has operations across Canada.

If an unintended consequence of these tax changes leads to fewer entrepreneurs – people deciding it is just easier to work for someone else, the economy and our society will be worse off for it.

As I have written about here many times New Brunswick does have a productivity challenge. We have to be a little careful we talk about productivity because different industries have different mixes of labour, capital and technology so comparing productivity measures in jurisdictions with fundamentally different industrial structures is not particularly valuable. For example, the oil and gas extraction sector generates $653 in labour productivity per hour while the accommodation and food services sector generates $18 per hour. Comparing an oil and gas-based economy to a tourism-based economy on productivity measures wouldn’t make sense. But comparing the tourism economy in various jurisdictions should help us understand which jurisdictions are more productive because it is more apples to apples – at least MacIntosh to Cortland and not avocados to blueberries.

With that caveat in place, New Brunswick still has a productivity challenge. As shown in the following table across a wide variety of industries there are big gaps – across all business sectors (again beware!) the gap is over 27 percent between New Brunswick and Canada. BTW there are a few where we have a productivity advantage – such as accounting services – which should be a hint that we may be able to offer these services nationally…..

There are many theories about the productivity gap. Some say it’s because we don’t have enough larger firms with the scale to drive productivity. Some say it’s because we historically had access to a lot of cheap labour so we drove a labour-intensive economic development model (governments still mostly support firms that create more jobs). Some say its because many of our industries were shielded from competition because they serviced small, local niche markets and were not exposed to global competition. Some say our business owners systemically haven’t invested enough in cpaital and technology. Whatever the reason (s), the problem exists and as we become even more exposed to global competition (think Amazon, Fiverr and other gig economy platforms) we will need to become more productive as a province.

So what do we do about this productivity challenge? I would propose we take what I call the Merv and Cook show on the road. Merv, of course, is Merv Symes representing Sympicity Designs which is an NB-based firm that is great at helping companies redesign their strategy and processes to drive better outcomes. Cook, of course, is Eric Cook, head of RPC – the largest R&D support organization in New Brunswick by a wide margin.

If you need a system and process redesign, Merv will put you on the rack and stretch until you get it done. If you need an engineered or science-based solution to your productivity challenge, Eric’s team will tinker until a solution is found.

So what we need then is for every small to medium-sized firm (and many large too) to take advantage of the Merv and Cook show. The ones that do mostly achieve significant productivity gains. But as with all things in New Brunswick we have a scale problem. Instead of dozens of firms deliberately moving on productivity – we need hundreds – even thousands to do so.

Disclaimer: Merv and Cook is actually not a thing (that I know of). They are two separate entities developing their own businesses. I just like the combo because they come at the same problems from substantially different angles.

]]>http://davidwcampbell.com/2017/09/have-you-seen-the-merv-and-cook-show-an-idea-to-boost-our-productivity/feed/0Are we a hustling, striving place or a great place to slow down and relax? Depends on who you ask.http://davidwcampbell.com/2017/09/are-we-a-hustling-striving-place-or-a-great-place-to-slow-down-and-relax-depends-on-who-you-ask/
http://davidwcampbell.com/2017/09/are-we-a-hustling-striving-place-or-a-great-place-to-slow-down-and-relax-depends-on-who-you-ask/#commentsWed, 06 Sep 2017 11:25:25 +0000http://davidwcampbell.com/?p=6908Continue reading →]]>Almost 25 years ago I took my first post-MBA job in New Brunswick. It was with the NB Department of Economic Development and Tourism (EDT) or maybe it was the NB Department of Economic Development, Tourism and Culture (?). Anyway, I was hired for a 2-3 months’ temporary position and I hustled it into 3.5 years and ultimately a good start to my career.

One of the most memorable moments of that period was a presentation made by then EDT DM Francis McGuire. He called the whole staff into a big room somewhere and put up a slide deck with his vision for the department. I don’t remember most of what he said that day but I do remember him stating emphatically “I never want to hear the %$X&#! term ‘Picture Province’ mentioned by this department or this government ever again!” (colourful language bleeped out but if you know Francis use your imagination).

His point was that GNB under McKenna was trying to re-position New Brunswick as a dynamic place with thriving urban centres and bustling rural communities. The vision was of a striving New Brunswick – carving out its economic role within Canada and around the world. If you come to New Brunswick you work hard and play hard. This was directly meant to counter specific data from polling that suggested New Brunswickers were perceived by the rest of Canada as kind of comfortable, lazy and laid back.

Of course old habits die hard. 25 years after McGuire’s emphatic pronouncement, here is a tourism billboard.

I know what you are going to say. This is a tourism message. That New Brunswick has great, uncrowded beaches. It’s an ideal place to come and lay on the beach. But if your economic development brand is one promoting hard working, bustling urban centres – the tourism message kind of counters this brand.

How about this billboard (pulled from Google). Again, a powerful tourism message that New Brunswick is a great place to relax and put up your feet.

I’ve never really postured as an expert in marketing. In fact, I probably stink in this black art but I would suggest there must be a way to align the messages. Maybe people mountain biking with a strained look on their face or shots of our urban downtowns bustling with people or a shot of a beach with lots of folks (not too many!) or even a shot of water with actual boats on it.

If we want to portray New Brunswick as an empty place with nothing going on but lots of opportunity to lay around on the beach – this may end up being a self-fulfilling prophecy.

]]>http://davidwcampbell.com/2017/09/are-we-a-hustling-striving-place-or-a-great-place-to-slow-down-and-relax-depends-on-who-you-ask/feed/0Fighting the biggest battle of our time with one hand tied behind our backhttp://davidwcampbell.com/2017/09/fighting-the-biggest-battle-of-our-time-with-one-hand-tied-behind-our-backs/
http://davidwcampbell.com/2017/09/fighting-the-biggest-battle-of-our-time-with-one-hand-tied-behind-our-backs/#commentsFri, 01 Sep 2017 11:01:27 +0000http://davidwcampbell.com/?p=6901Continue reading →]]>New Brunswick’s three larger urban centres (Fredericton, Moncton and Saint John) are trying to do something that is rare in recent Canadian history – dramatically increase immigration. Historically, most immigrants have flowed into the largest urban centres – without substantial spikes. For example, the Toronto area is still the top destination for immigrants but it has never seen a 3 or 4 times increase in a short period of time.

If you look at the average immigrant flow (from Statistics Canada’s components of population growth tables) into the Moncton CMA it is up by nearly 500 percent in just a decade (I used five year increments to smooth out the effect of Syrian immigrants in the most recent year). Saint John’s immigrant flow is up by over 160 per cent. This is unprecedented. It is also fundamental if we are to see New Brunswick’s labour market growing again and if we would like to see a sustained return to economic growth.

I believe this is the most important challenge of our time. If New Brunswick is to grow it will need to become far more multicultural – in a condensed period of time – far more quickly than places like Toronto and Vancouver which had a more paced move towards their now highly multicultural societies.

We can’t do this with one hand tied behind our back. Of course we will see outward migration of some of these immigrants. That is natural – look at Winnipeg as an example. Don’t criticize the types of immigrants coming here. Just look at the data for Canada’s large urban centres – immigrants flowed into industries that needed them. Don’t use the fact that some New Brunswickers use EI as an annual income supplement to hurt those industries that need workers to grow. Instead of restricting the flow of federal dollars in support of immigrants – those funds should be dramatically expanded.

How can we ensure such an expedited integration of immigrants without a massive effort? We need stronger ethnocultural community associations. We need churches to step up as they do in Manitoba and be catalysts for retention. We need our public institutions – hospitals, schools – to embrace the challenge of immigration. Giddy up, folks.

I have argued on these pages that we are living in inconsequential times. There haven’t been many big battles to fight. It’s been all about incrementalism. Now we have one. A big one. A whopper. It’s fundamental to our future. If we want to be a growing, thriving and dynamic economy – we will need to become far more multicultural. I challenge anyone to prove – with data – how New Brunswick will be able to sustainably fund its public services over the next 10-20 years without a significant rise in its younger population and workforce – without a massive increase in transfers from the federal government.

This is the big battle of our time. We need all hands on deck – especially the federal government.

]]>http://davidwcampbell.com/2017/09/fighting-the-biggest-battle-of-our-time-with-one-hand-tied-behind-our-backs/feed/3Stop your obsession with youth out-migration, pleasehttp://davidwcampbell.com/2017/09/stop-your-obsession-with-youth-out-migration-please/
http://davidwcampbell.com/2017/09/stop-your-obsession-with-youth-out-migration-please/#commentsFri, 01 Sep 2017 10:29:33 +0000http://davidwcampbell.com/?p=6896Continue reading →]]>There was a good article in the Globe & Mail recently outlining New Brunswick’s demographic challenges and how that is dampening the economic potential of the province. It certainly wasn’t a positive article – but it wasn’t the typical hatchet job either. It’s behind the paywall so I can’t link it here.

It was written by a former NBer. In my experience, there are two kinds of former NBers – those that are bitter and want to crap on their former province and those that still have an affinity to their former home and a nuanced view of things. Unfortunately some of the former have found their way into senior federal government roles, but I digress.

Unfortunately the writer continues to lament the woeful out-migration of New Brunswick’s youth and he continues to make this the main plot line for New Brunswick’s economic challenges.

In fact, it is the main plot line but for the exact opposite reason.

There are many reasons why young New Brunswickers leave – the main one being for economic opportunity. This is not controversial – most people agree on this point. But like most things in life you have to avoid the superficial explanation and dig a little deeper. We encourage our young people to go to university – a good thing – but the fact remains that the economy is creating a lot of jobs that do not require a university degree. Do we expect these young university educated workers to stay for jobs that don’t require a university degree?

Someone told me recently they went to UdeM engineering and 53 of the 55 people that graduated with them left the province. Do I think we should eliminate UdeM engineering? Absolutely not. In fact I think we should do a looooot more to position this talent pool as an asset to attract engineering firms or to support local engineering firm expansion. Many of these young Francophone engineers would be happy to stay in New Brunswick and work.

But I don’t think that engineer will go work in a back office or a warehouse or a manufacturing assembly line.

The facts are simple. People are more mobile than ever before. We are attracting more immigrants and more of them are showing up in the interprovincial migration data. Again, what do you expect? Immigrants don’t have roots here – very little connective tissue to the local community. Of course many will leave. The great Toronto loses an average of 23,000 per year on a net basis to intra- and inter-provincial migration. There isn’t a lot of hand wringing about the lost youth population in Toronto. They just go out and bring in 75,000 more every year. When Manitoba and PEI massively boosted immigrant numbers a few years ago – their net interprovincial migration spiked – as you would expect it to. But they kept more than they lost – and their economies benefited from it.

Canada is a place where it is not hard to find hypocrisy. I hear at some some federal bureaucrats are lamenting the fact that a lot of the jobs under the Atlantic Immigration Pilot are in service industries and other lower wage sectors. They would have preferred a lot more higher end jobs.

The flexibility to fill gaps in the labour market – across the spectrum – was the MAIN point of the Atlantic Immigration Pilot. Tens of thousands of immigrants flow into Ontario every year into lower skilled jobs – even a peek at the data confirms this – more than 60% of manufacturing workers are first generation immigrants, more than 50% of contact centre workers – something like 50% of overall service industry workers in Toronto are first generation immigrants.

The point is that there are many pathways into Canada – family class, refugee, student, etc. and New Brunswick has been restricted to the pathways that are targeted at high skilled immigrants. The AIP was meant to fix that and fill gaps in the labour market – sending a signal that employers can find workers here and foster expansions and growth.

I’m not going to litigate all the other issues here. I’m tired of it. Yes there are lots of people using EI. Yes there are people that prefer to not work rather than work the jobs on offer. Yadda. Yadda. Yadda. Guess what, there are exactly the same kinds of folks in Ontario and everywhere in Canada – just a little higher proportion here. Please don’t hold the rest of the economy hostage because of this. It’s patently unfair to hobble New Brunswick just as it wants to get serious about economic growth.

Don’t obsess with youth out-migration. Many leave and come back and are better for the experience. Those that don’t come back – fine. They are building their careers and lives in a great country.

If we use this as an excuse to hold back immigration – we are dooming New Brunswick to a downward demographic spiral.

]]>http://davidwcampbell.com/2017/09/stop-your-obsession-with-youth-out-migration-please/feed/1Embrace your inner snowwoman/snowmanhttp://davidwcampbell.com/2017/08/embrace-your-inner-snowwomansnowman/
http://davidwcampbell.com/2017/08/embrace-your-inner-snowwomansnowman/#commentsWed, 30 Aug 2017 12:07:59 +0000http://davidwcampbell.com/?p=6890Continue reading →]]>Lately I have been watching promotional videos for a few small urban centres in Canada. They are mostly well produced and make the communities look pristine, friendly and mostly charming. In others, at first glance a good place to live – which is kind of the point.

But all of them left out snow.

One showed a brief clip of a hockey team but no outdoor shots of snow, skating, skiing, sliding, snowshoeing, hiking – nothing. Normally when I visit a community in Canada (and the US) I buy a book on that community and, again, in most cases snow and winter barely make an appearance. I have a 100+ page book of photographs from Minnesota and not a single one in winter.

Twenty years ago it wasn’t that big a deal. Everyone was very familiar with winter – whether or not it showed up in promotional materials. But now we are trying to attract migrants from mostly warm climates and we need to be clear with them that we have 5 months of snow and fairly cold winters.

In fact, we should embrace and promote winter as an advantage. I’ve always found it strange that we don’t have more companies offering to rent skates, snowshoes, toboggans, cross-country skis, etc. Normally a city rec. department might do some of this but for the most part we just assume that Canadians have all the gear they want. If they reach 20 years old and don’t own skates they are probably not candidates to be out skating. But this is not the case with migrants. They come here with none of the winter gear – we should encourage them to try it out. We should host snowwoman making contests, offer free seminars on learning to skate, put on clinics regarding how to stay warm when playing outside.

We should promote winter tourism opportunities – ice fishing, winter bonfires in the woods, etc. Everyone should be encouraged to get out there and enjoy.

I have a lot of immigrant friends. Some love winter. Some endure winter. This, BTW, is the same as my born-in-Canada friends.

This matters. If New Brunswick is to grow it will need to attract and retain thousands of new immigrants each year as we move forward. There is a lot we can do to improve retention and one of those things is not to pretend winter doesn’t exist or to suggest people should just do their best to make it through. That’s not good enough.

]]>http://davidwcampbell.com/2017/08/embrace-your-inner-snowwomansnowman/feed/0What do we really want from free (r) trade? Back to first principleshttp://davidwcampbell.com/2017/08/what-do-we-really-want-from-free-r-trade-a-re-examination/
http://davidwcampbell.com/2017/08/what-do-we-really-want-from-free-r-trade-a-re-examination/#commentsThu, 24 Aug 2017 10:36:42 +0000http://davidwcampbell.com/?p=6884Continue reading →]]>As we start the renegotiation of NAFTA, there is lots of chatter in the media about the importance of trade, how critical it is to the Canadian economy, how it boosts GDP by x and makes us more productive, yadda, yadda, yadda.

It’s important to go back to the start and ask ourselves what we are trying to accomplish with free (r) trade. And, by the way, close cousins – free movement of people, free flow of capital, and free flow of ideas – may be even more important now.

Why trade at all? Why not build self-contained economies and have all goods and services produced within the hermetically sealed bubble?

I think Jared Diamond provides some core reasoning as to why trade matters. Diamond is best known for the Pulitzer prize winning Guns, Germs, and Steel, but I prefer Collapse if you want a good chronological view of how economies/states evolved over time. Certainly trade is not the focus of either book but you get a good overview as a bonus.

The bottom line is that trade is supposed to be mutually beneficial. While the benefit may be a bit lopsided there would be no reason to pursue free (r) trade if one jurisdiction benefited and the other hurt. Diamond talks about the earliest recorded examples of trade – inland tribes that were good at making arrowheads and other instruments from stone trading with coastal tribes that were good at harvesting fish. The benefited from the expertise of each other and both were better off.

Many economists tend to have a fairly stern view of the impacts of trade. Yes, it will cause economic upheaval in specific industries and geographies within the country but overall it will be better for the whole.

But in free, democratic jurisdictions, pure economic efficiency can get grounded on the shoals of practical reality. If enough communities and industries are hurt by trade (even if that is offset by winners), you can get Trump and this mood of anti-free trade.

Of course, the cold blooded economist looking at spreadsheets and crunching data will say that countries need to encourage broad intra-jurisdictional migration, retraining rather than income subsidization and more of a ‘tough love’ to the transitional period. They (many) argue that the same ruthless efficiency brought to industries by free trade should be applied to the labour market.

But that again ignores some fundamental issues. Lots of people like where they live. They don’t want to move. It’s hard to retrain people – you can’t just snap your fingers. And there is that little thing called democracy. If the people revolt against trade…..

There hasn’t been much backlash about free trade in Atlantic Canada. People are told on a regular basis that we are highly dependent on exports – fish, wood, agriculture, oil – and that has more or less sunk in.

For me, I think the starting point for the concept of free (r) trade in democratic societies has to be mutual benefit – quid-pro-quo. I’ve written about this on many occasions. There is good research (see Gladwell) that people will actually accept a worse outcome for themselves if they perceive the other party is getting a greater benefit. If someone is offering to give you and I $100 but you get to decide how to divide the money and I get to decide whether or not the deal gets done – the research shows you have to get pretty close to 50/50 to get acceptance. In some pure, spreadsheet economic theory I should take $1 because it is better than $0 – but I find it egregiously unfair that I would get only $1 while you get $99 even though I am better off by $1. So I will kibosh the whole thing because you are getting a better deal than me.

I will hurt my economic fortunes because I perceive you are getting a ‘better deal’.

Human nature and democratic politics will not be usurped by economists.

]]>http://davidwcampbell.com/2017/08/what-do-we-really-want-from-free-r-trade-a-re-examination/feed/0Economic development: All about the money, honey?http://davidwcampbell.com/2017/08/economic-development-all-about-the-money-honey/
http://davidwcampbell.com/2017/08/economic-development-all-about-the-money-honey/#commentsMon, 21 Aug 2017 01:45:34 +0000http://davidwcampbell.com/?p=6879Continue reading →]]>This is a recurring theme on this blog but I feel it is timely to raise it again. Specifically I am talking about the role of government in support of economic development.

I’ve seen multiple people on LinkedIn peddling new federal government programs to promote cleantech development, help companies export, etc. They are all under the umbrella of the Atlantic Growth Strategy.

Is the Atlantic Growth Strategy a growth strategy or is it a relatively small pile of cash doled out to firms by earnest bureaucrats?

This is a fundamental strategic issue for Atlantic Canada. If the government’s goal is getting the regional economy back to a sustained level of growth, that may or may not entail more direct cash handouts to firms. A true regional growth strategy would identify the causes of economic stagnation – low levels of inward migration, increased global competition, lack of new, high growth potential entrepreneurs, lack of multinational investment, etc. and then put some serious thought to what role can (or should) government play to influence positive economic growth?

It all seems to boil down to the cash. It’s easier that way. For government it is easy to set up a $20 million fund, build program rules around its distribution, dole out the cash and monitor the results. It is hard – sometimes really hard – to positively impact economic growth.

As I have said before, I am not opposed to direct cash transfers – where there is a demonstrated competitive need and a strong ROI but if governments are looking at how they can influence economic growth in a positive way the thinking has to go way beyond cash to firms. Best case scenario the cash has a slightly positive impact. Worst case it is just tax dollars crowding out private sector dollars – as many firms have told me government cash can be had at much better terms compared to banks or investors – so why not take the government cash?

Think about New Brunswick. The economy is roughly $30 billion (real GDP). If you want to see a 3% growth rate you will need the real GDP to grow by $900 million per year. You won’t get this done by making a few zero interest loans to cleantech firms or giving up to $15,000 for a small business to start exporting.

ACOA has approximately 600 staff in Atlantic Canada. The various provincial agencies (ONB, NSBI, etc.) have roughly 500 staff (conservative estimate) – roll up all local economic development agencies, CBDCs, allied organizations such as NRC, NBIF, Innovacorp, etc. and you get easily another 300-400 staff. So we have roughly 1,400 – 1,500 people in Atlantic Canada paid by government to do economic development (somewhere around $100 million just in payroll and benefits). There is about one economic development person for every 50 firms around Atl. Canada. There is one economic development person for every 1.5 exporting firms (international exports).

With all this horsepower we should be able to move a little bit beyond doling out cash.

]]>http://davidwcampbell.com/2017/08/economic-development-all-about-the-money-honey/feed/0Looking for Bootstraps: The Musicalhttp://davidwcampbell.com/2017/08/looking-for-bootstraps-the-musical/
http://davidwcampbell.com/2017/08/looking-for-bootstraps-the-musical/#commentsSun, 20 Aug 2017 10:35:16 +0000http://davidwcampbell.com/?p=6875Continue reading →]]>In my view, Donald Savoie’s Looking for Bootstraps should be required reading in the Maritimes. As a follow up to Visiting Grandchildren, he has added new content and important new thoughts on the issue of economic development in the three Maritime Provinces.

One of the challenges, however; is the format. Although Savoie deliberately writes for a broader audience, it’s certainly not written for the average Grade 8 student.

My 16 year old daughter is taken by the musical Hamilton. She knows it backwards and forwards. She has the music, a book about it and has done a ton of research. In fact, she knows about as much about Alexander Hamilton’s life as the average U.S. presidential historian – how he lived, his role in the revolution, how many federalist papers he wrote and what he focused on, his feud with Burr (and untimely death by duel), etc. She was rattling off these facts one day recently and I asked her how much she knew about Sir John A. or Wilfrid Laurier or the Fathers of Confederation?

Not much, she said, but if they would write a musical, she would nail it. And then she went on to lecture me about pedagogy and how the current approach to teaching is mis-aligned with how students best learn circa 2017.

Fair enough.

But my thoughts turned back to the old sage of economic development.

How about “Looking for Bootstraps: The Musical”?

As usual here, I put this forward only partially in jest. If we found ways to broaden the appeal of the content we could reach broader groups and better explain the history and sources of the region’s economic challenges and get people better motivated about the solutions.

For example, I think Savoie’s book should be given to every high school student in the province and should be discussed and debated in class. If the best way to get this done would be to distill the content down to infographics and 140 character tweets, then so be it.

The truth is that New Brunswickers – and Maritimers – have been inured to the economic reality here. Most just believe the standard view that this region is economically depressed and there isn’t much to do about it. If you can’t find work here – you go down the road. After 20+ years of studying this, I can tell you most people are resigned to the fact and not particularly concerned about it.

Savoie’s story would explain how we got here and provide pathways to improve our lot. But we have to find ways to broaden the base. All of the usual suspects – like me – have read his book – just like the many others he has written on related subjects. And we haven’t made much difference. Maybe we should broaden the base.

]]>http://davidwcampbell.com/2017/08/looking-for-bootstraps-the-musical/feed/0When does something rise to the level of ‘controversial’?http://davidwcampbell.com/2017/08/when-does-something-rise-to-the-level-of-controversial/
http://davidwcampbell.com/2017/08/when-does-something-rise-to-the-level-of-controversial/#commentsMon, 14 Aug 2017 21:11:50 +0000http://davidwcampbell.com/?p=6869Continue reading →]]>I was surprised to read this CBC article describing the Sisson Mine as ‘controversial’. I’m not sure it is particularly controversial. It has gone through a thorough environmental process and received both federal and provincial approvals. A while ago the CBC sent a journalist out to the Stanley area to ask local residents what they thought and it was mostly positive.

There are mining projects just like this in almost every province. Manitoba generates $2.8 billion worth of GDP from mining. Quebec $4.7 billion. BC $10.7 billion. New Brunswick? We’re down to $270 million worth of GDP from mining and that includes quarrying.

What makes something rise to the level of controversial? Anne Murray fought against wind turbines in Nova Scotia. Were they controversial? Long time residents of San Francisco are fighting the evil Google and its distortion of housing prices and general disruption of SF culture. Is Google controversial? A UdeM professor once authored a documentary that was deeply critical of contact centres – are they controversial?

You know where I am going with this. A lot of people trust the CBC. They rely on it for their news. Many New Brunswickers that would likely see the importance of Sisson Mine – most people realize that the products they consume are filled with mined natural resources and understand that Canada is a country with vast mineral resources – but if the CBC is now saying it is ‘controversial’ they may start to think there is something more risky about this specific mining project – compared to the hundreds of mines across the country. And when they read about the one massive mining disaster in BC – and not the hundreds that have been developed with a very limited environmental footprint – they may start to change their minds.

I personally don’t think the Sisson mine is particularly controversial. There are some folks opposed – that is natural in a democracy. If these projects go through rigorous provincial and federal environmental reviews and pass I’m not sure the media should describe them as controversial.

In reality, New Brunswick could use the economic boost. We used to get close to a billion dollars worth of GDP from mining (when Bathurst was going full steam, and later when potash was booming) and now it is down to a piddly $268 million. The 10 provinces combined generate $168 billion worth of provincial GDP from mining and NB gets about two-tenths of one per cent of that GDP. A little more would be welcome.

]]>http://davidwcampbell.com/2017/08/when-does-something-rise-to-the-level-of-controversial/feed/0The rise of Glamping. What can we learn from Mongolia about tourism investment?http://davidwcampbell.com/2017/08/the-rise-of-glamping-what-can-we-learn-from-mongolia-about-tourism-investment/
http://davidwcampbell.com/2017/08/the-rise-of-glamping-what-can-we-learn-from-mongolia-about-tourism-investment/#commentsSun, 13 Aug 2017 01:45:52 +0000http://davidwcampbell.com/?p=6866Continue reading →]]>There is an interesting article in the Economist this week about the rise of ‘glamping’ in China. This glamorous camping is done by rich Chinese. The yurts have “beds, windows, Wi-Fi and en suite bathrooms.” And this “A single campsite in Hubei can accommodate 8,000 people. Many offer entertainment too. The Swan Lake tourists enjoy Mongolian banquets and dancing in a giant concrete yurt.”

I have thought for a long time that if New Brunswick – and the Maritimes – want to seriously boost tourism – we have to be far more focused on tourism investment. As I have written many times before 98% of our effort is on how we get more tourists here and not on how we attract really nifty new tourism investments that will attract tourists here.

This may be an accident of history in New Brunswick but we have never really put any focus on trying to attract tourism investment or entrepreneurship. There have been a few less than successful efforts like putting government money into “cottage clusters” in the 1990s. But that is not what I am talking about. In fact, I’m not talking about government incentives at all.

I’m talking about a deliberate process of identifying potential new tourism investments that might work at the local level all around the region and then promoting those potential opportunities to tourism entrepreneurs. If you don’t like the idea of ‘government’ doing that work, fine – give industry the mandate – or consultants – or, I don’t know go ask the Mongolians – it seems to be working for the yurts.

Instead of putting all the focus on trying to boost tourist numbers we should put a focus on boosting tourism investors. Then we’ll have the product that will boost the tourism numbers.

]]>http://davidwcampbell.com/2017/08/the-rise-of-glamping-what-can-we-learn-from-mongolia-about-tourism-investment/feed/1Foxconn, incentives and ROI: Reduxhttp://davidwcampbell.com/2017/08/foxconn-incentives-and-roi-redux/
http://davidwcampbell.com/2017/08/foxconn-incentives-and-roi-redux/#commentsSun, 13 Aug 2017 01:34:39 +0000http://davidwcampbell.com/?p=6863Continue reading →]]>I recently wrote about the big Foxconn expansion in Wisconsin and the $3 billion incentive package. I wondered about the ROI on that level of incentives. It wasn’t clear to me if the project would achieve any real ROI over time – based on the economic impact numbers published by the Wisconsin government.

Then I read this. It’s an interview on the project from what appears to be a respectable economic development consulting firm. Here’s the point that bugs me. It’s made by a consultant: “Three billion of anything is a lot. But again, as with everything when you dig deeper and look at the economic upside of jobs and investment you can see why Wisconsin or quite frankly any state would come to the table so aggressively. You know, I guess one of the things I try and do is remove all the zeros and think about it in simple terms and you know this is simplifying it perhaps too much but Wisconsin is getting $10 and their giving back $3.”

Nope. That is not correct. The only ROI measure that works for government investment into economic development is incremental tax dollars. Comparing the $10 billion investment to the $3 billion in tax incentives is like a company comparing revenues and profits – they are related but separate concepts.

This Reuters article makes the point. Based on the scenario outlined, the article says the state might not break even on the $3 billion for 25 years in terms of incremental state taxes.

Economic developers cannot miss this fundamental point. The only ROI that matters is “for every tax dollar we pay out, how many incremental tax dollars will be generated?”.

The public purpose of economic development is not jobs or investment or new plants. It is to drive economic activity to ensure there is enough tax revenue to pay for good quality public services and public infrastructure. That’s it. If a government dips into the tax coffers and spend $1 million to attract a firm and the tax revenue from that firm over 10 years is $5 million – that means for every $1 in you get $5 out- that is an ROI.

Although, as an aside, there are other public ‘costs’ to having that company in your state. It will have trucks beating up the roads, it’s employees will have kids in schools and they may use public health care – you get the point. In the example above, the calculus is really: $1 million worth of incentives + $2 million worth of public ‘cost’ over the ten years – to generate $5 million in incremental taxes for a real ROI of 0.66 – for every dollar we put in, we generated an incremental $0.66 in tax revenue above the cost of the incentives and the public costs associated directly with the project.

I’m all for attracting big plants. I think it will help put Wisconsin on the map and may yield benefits not yet quantified. But if we move to a world where we don’t care about taxes-based ROI – I think we are heading into dangerous territory. I remember when the big auto manufacturing plants were getting $200 million and $300 million back in the 1990s there was outrage- but there was a clearly definable tax-based ROI over 10-15 years. Auto has a huge supply chain which helps.

And as for economic development experts and consultants, they are not doing the public any favors by spreading this nonsense about “Wisconsin is getting $10 and their giving back $3.”

]]>http://davidwcampbell.com/2017/08/foxconn-incentives-and-roi-redux/feed/1The monthly labour force survey: Putting little Jonny to workhttp://davidwcampbell.com/2017/08/the-monthly-labour-force-survey-putting-little-jonny-to-work/
http://davidwcampbell.com/2017/08/the-monthly-labour-force-survey-putting-little-jonny-to-work/#commentsSun, 06 Aug 2017 18:25:12 +0000http://davidwcampbell.com/?p=6854Continue reading →]]>The journalist Jacques Poitras likes to do his little “Where is this place” on Twitter. Because originality is challenging these days, I’ll borrow his game with a twist. I’ll ask – when is this? To be specific what was happening in May 2003 that would make this chart so significant?

Did you guess it? Without Googling? When the May 2003 labour force survey data was published it was right in the middle of the 2003 New Brunswick election campaign. Why I remember this so vividly was the strange response Premier Lord made at the time. When he heard the employed labour force dropped by 8,000 in one month – his response was “I don’t believe it”. Now considering Statistics Canada is one of the most respected national statistics agencies in the world, I would have thought he would have went with the usual boilerplate about typical monthly fluctuations, the longer term trend looks better, etc. but he chose to go with “I don’t believe it”. Anyway, he ended up taking a bit of a beating in 2003 and nearly losing what they had thought would be a sure thing election. I’m not sure the LFS swayed a lot of votes but it certainly was bad timing.

Take another look at the chart above. What happened the very next month? Almost a complete course correction. Now take a look at the labour force trend in New Brunswick in recent months (remember the labour force is the sum of those working and looking for work). In just the last couple of years I see at least three big month-to-month swings in the size of the labour market – down big one month and up big the next. This is the nature of the LFS. It is equally possible when the September LFS is published the NB labour market could have increased by 4,000 or 5,000 – or not. The point is that month to month trends are not reliable.

I have to admit it was kind of cute to see the government publish “lowest unemployment rate since 1976!” with a NB map graphic – and then the opposition published “biggest labour force decline since 1976!” minutes later.

Rather than snazzy infographics – both the government and the opposition should have used the data as a teaching moment. New Brunswickers need to understand that the long term trend for the labour force is that it is in decline. You have to go all the way back to January 2001 – the month before my youngest was born (now she is VP student council at Moncton High in Grade 11) to find the last time the labour market was smaller in July than it was last month.

A shrinking labour market is a drag on economic growth. Couple this with rising public service cost pressures (i.e. health care) and you have a long term challenge. We fix the challenge by deliberately growing the workforce with people who want to work the jobs on offer.

This is the biggest issue that no one really wants to talk about. I hear on a weekly basis someone saying that “little Jonny had to move to Alberta because there were no jobs here – why do we need immigrants?” The truth is there are lots of jobs if little Jonny wants to move around within New Brunswick and is prepared to take the jobs on offer. In January, Statistics Canada reported in its Job Vacancy survey there were 5,700 jobs available in that month alone. There were 1,800 jobs in sales and service occupations, nearly 800 in manufacturing jobs and 650 in trades related jobs and 600 in business and finance jobs. But the average wage on offer wasn’t particularly high for many of the jobs as shown in the following chart. If you can’t do the math on these jobs I will do it for you. On an annualized basis these jobs pay between around $23,000 and $34,000 per year.

But if we can’t fill these jobs, the economy will not grow and create the higher paying jobs that Jonny, who graduated with a liberal arts degree, wants and his mother thinks he deserves.

So we either a) find pockets of potential workers in New Brunswick and find a way to get them to take the jobs, or b) we allow the labour market to tighten even more and force up wage rates (by the way wages in New Brunswick on average have been growing much faster than the country as a whole for the past 3-4 years) or c) we find a new source of workers that want to work the jobs on offer.

Option A is not working too well and that is why the labour market hasn’t grown in 15 years (July to July). There are a whole bunch of reasons why people don’t attach to the labour market – from the 38,000 who collect EI each year to students for whom a job would be nice but not worth moving for or taking a job beneath them. In addition there is the issue of skills mismatch. A recently retired logger probably isn’t going to work in a contact centre.

Option B is kind of what we are doing already and how’s that working out? Annual real GDP growth since 2008 of well below 1 percent going back to 2008. Companies that can shift work out of New Brunswick are doing it (truckers, manufacturing line workers, etc.) and many that can’t or won’t just aren’t expanding here. Don’t get me wrong I think there is some potential to boost wage rates through productivity but at the point it triggers dis-investment – it is not worth it.

So that leaves Option C – the option used by Manitoba (fastest growing GDP since 2009) and essentially all provinces that are growing. Go find the workers – from far and wide – that you need in your economy to foster growth.

]]>http://davidwcampbell.com/2017/08/the-monthly-labour-force-survey-putting-little-jonny-to-work/feed/0To diversify or not to diversify – the economy – that is the questionhttp://davidwcampbell.com/2017/08/to-diversify-or-not-to-diversify-the-economy-that-is-the-question/
http://davidwcampbell.com/2017/08/to-diversify-or-not-to-diversify-the-economy-that-is-the-question/#commentsThu, 03 Aug 2017 11:17:01 +0000http://davidwcampbell.com/?p=6849Continue reading →]]>Jock Finlayson, from the Business Council of British Columbia, recently wrote a commentary where he suggested Canada’s export mix was not sufficiently diverse and too tied to the American market in the Trump era. He states that “Most other advanced economies – the U.S., Britain, Germany, France, the Netherlands, even Italy – exhibit greater product diversity in their export mix.”

There is some truth to his argument but there are also some nuances. First, you have to dance with the girl you took to the prom. Canada has large oil, gas, mineral deposits, large land area for agriculture, forestry and one of the largest coastlines in the world for fish harvesting. Because you are good in these areas isn’t a bad thing. Second, there are a few national industries not tied to these core natural advantages that are key exporters – auto manufacturing, aerospace manufacturing, film/media production, some pharma, and some financial services, less ICT but still important). The challenge here, and the little secret no one wants to talk about, is that it took (takes) huge subsidies and protections to see these industries emerge over many decades. As an aside, of course, New Brunswick generates virtually no economic value from any of these ‘national’ export industries.

So, what to do? If you rely too heavily on your core natural industries – you will get spanked by economists. If you – through huge subsidies, side-deals, protectionism – incubate a bunch of IP-based industries like auto/aero/film/finance – you are accused of picking winners/losers and distorting market forces. If you revert to the old tripe that a country should just open borders, cut taxes and red tape and sit back and wait for investment to roll in – where has that worked?

New Brunswick and national champion industries
Just to pick up on my previous point about NB and how it has fared in the national champion ‘business’ – take a look at the following table. It shows New Brunswick’s share of Canada’s international exports from the top 10 non-natural resources based sectors (i.e. agriculture, forest products, minerals, oil & gas, fish – I left plastic resins in there). Essentially, New Brunswick generates a trivial amount of international exports in these areas. We generate some exports in engineering services but relative to the national total still less than half our per capita amount. Same with tourism – the proxy here is accommodation services. And of course we generate virtually no export revenue in auto, aero, pharma. By the way, both Nova Scotia and PEI put up pretty good export numbers in aero and pharma.

Donald Savoie made another pitch for Maritime Union or at least better Maritime cooperation in a recent Halifax Chronicle Herald commentary. He focused his message at business leaders suggesting they should do a better job of promoting regional integration.

This has been an idea that is as old as Canada itself. I’ve been to multiple events where it has been discussed over the past 20+ years and at least the concept of formal Maritime Union never gets beyond the highest level discussion. I have said elsewhere – and continue to maintain – that if the region’s economy continues to stagnate sometime around 2026 Maritime Union will be more or less forced on the region by the federal government.

The good news is that trade between NB and NS has been going up in recent years (or at least the most recent years I have access to which goes up to 2013). Nova Scotia is now our second biggest export market by value at $2.4 billion compared to $3.9 billion to Quebec. If you look at what we are exporting there are a few interesting products and services. The bulk of exports comes from refined old and forest products but office administrative services (AKA contact centres) export revenue was over $113 million in 2013 and gambling was worth more than $63 million.

While I have been pushing the idea that New Brunswick needs to be focused more on where it fits in the global economy – investment, people and idea flows – that doesn’t mean we should ignore the low hanging fruit in our backyard. The Economist magazine runs stories its seems on a monthly basis of how trade flows continue to be stubbornly tied to geographic proximity (they are discussing it in the context of Brexit). New Brunswick should work closely with its partners in NS and PEI – government-to-government and business-to-business.

]]>http://davidwcampbell.com/2017/08/the-tantramar-marsh-export-strategy/feed/0Embrace and celebrate your inner snowmanhttp://davidwcampbell.com/2017/07/embrace-and-celebrate-your-inner-snowman/
http://davidwcampbell.com/2017/07/embrace-and-celebrate-your-inner-snowman/#commentsMon, 31 Jul 2017 18:13:09 +0000http://davidwcampbell.com/?p=6841Continue reading →]]>This may not be the best time of year to bring it up but…. New Brunswick has long, cold winters. There, I said it. I know that some of you will have your hands over your ears while chanting nah, nah, nah, nah but, no matter, it is true. New Brunswick has long, cold winters.

I raise this because we spend a lot of time trying to pretend we don’t have winter – to annually erase it from our collective memory. If you leaf through picture books of the province, you will rarely see a single snowflake. I recently watched a 8 minute promotional video for a city in Northern Ontario that never once mentioned or showed anything even remotely like winter. My wife has an old bag of Manitoba flour from 50 years ago (she uses it as a crafty decoration). It’s for Manitoba Hard Wheat – branded as “Island Queen” with palm trees. I guess the idea is that if you eat this flour you will feel like an Island Queen in Cuba or somewhere. Let’s be honest. At the corner of Portage and Main in Winnipeg during January and February doesn’t feel like the tropics – no matter how much wheat you pump down your gullet.

It’s not just Canadians. I was given a picture book back in the 1990s promoting the State of Minnesota. Yes, you guessed it. Not a single photo of winter or ice.

Now that we have to get serious about attracting people to live here we have to be honest about the weather. In fact, we should embrace and celebrate it. It is part of who we are. It is part of our culture. There are lots of things to do in winter – skiing, skating, sliding, hiking, snowshoeing, ice fishing, winter camping, bonfires, etc. etc. etc. Don’t hunker down. Get out there in the frostiness and grab a newcomer while you are at it.

The next time I pick up an NB picture book, or see a city promotional video, I hope there are images of snowmen, ice fishing shacks and people skiing. It matters now more than ever.

]]>http://davidwcampbell.com/2017/07/embrace-and-celebrate-your-inner-snowman/feed/1Startups: The Serengeti Plain or a fun summer camp?http://davidwcampbell.com/2017/07/startups-the-serengeti-plain-or-a-fun-summer-camp/
http://davidwcampbell.com/2017/07/startups-the-serengeti-plain-or-a-fun-summer-camp/#commentsSat, 29 Jul 2017 14:42:17 +0000http://davidwcampbell.com/?p=6837Continue reading →]]>It is interesting to see how government and economic development groups have evolved their view on start-up companies over the last 2-3 decades. Government has always given money to support people who want to start their own business. I’ll bet their was even more money around 20 years ago to give to folks wanting to become an entrepreneur. The Transitional Jobs Fund (then Canada Jobs Fund) was giving out money to just about anyone that was unemployed. As I pointed out then, it didn’t do much to move the needle – the number of self-employed people didn’t go up much and the number of incorporated businesses with employees flat-lined and has been declining. My point was that it takes more than $10,000 to make an entrepreneur and it takes more than a little government coaxing to make a gritty, bet the farm kind of entrepreneur that wants to build something here and take it to the world.

Nowadays of course start-ups are the hippest thing. Governments throw millions of dollars at incubators, accelerators, VC funds, Angel funds, start-up camps, university start-up programs – giddy up all with the goal of making it as easy as possible to start, and presumably, grow a business.

I don’t particularly have a problem with this although I hope that governments/economic development groups are not coddling or keeping alive bad business ideas in the name of economic development. I’ve said it many times before, if governments start treating economic development like social development we are in trouble. In social development we are specifically trying to raise people out of bad circumstances – bad business plans for their personal lives if you will and we hope to help them succeed even if there are ‘subsidies’ involved. In strong and dynamic economies bad business plans die and die quickly.

Many entrepreneurs will try 3-4 things before they get it right. My old boss at a startup I worked for cashed out his RRSPs and then had to beg friends and family just to make the payroll a few times. He was a true believer – a gritty entrepreneur willing to put up his own risk capital and nearly bought the farm on more than one occasion. Now he has 30 staff and by all accounts is doing quite well.

We want more entrepreneurs – particularly those with scale up ideas and ambition. But I am not sure we will get there by setting up shiny new incubation centres or offering summer camps for entrepreneurs. I think that exposing young people to entrepreneurship as a career path is a good idea but I think we need to give more thought to the ‘who’ and the ‘what’.

Governments and economic development agencies tend to be pretty good at answering the door. If someone comes to them and says they want to start a business or expand in the province or move here – there are lots of folks to help them out. But go out and find/recruit the best ambitious entrepreneurs from around the world? Not so much. Proactively going out and finding immigrants and enticing them to move here to work in key industries? Not so much.

Because that is much, much harder. It’s easy to sit at home and offer financial assistance for businesses that walk through your door. The other requires much more time and effort and risk. But in the competitive world we face these days, we must get out of the comfort zone.

In fact, just like entrepreneurs we need to see the economic development landscape more like the Serengeti Plain and less like a bouncy ball pit.

]]>http://davidwcampbell.com/2017/07/startups-the-serengeti-plain-or-a-fun-summer-camp/feed/1Are you a peacock or an ostrich? The thorny world of community rankingshttp://davidwcampbell.com/2017/07/are-you-a-peacock-or-an-ostrich-the-thorny-world-of-community-rankings/
http://davidwcampbell.com/2017/07/are-you-a-peacock-or-an-ostrich-the-thorny-world-of-community-rankings/#commentsMon, 17 Jul 2017 10:29:41 +0000http://davidwcampbell.com/?p=6831Continue reading →]]>For those of you that may have missed it the annual ranking of best places to live in Canada came out recently. This type of ranking is- to say the least – controversial but is it relevant?

It seems to me these kinds of ‘best’ rankings have been proliferating in recent years. In a world with a glut of media – it is hard to write stories that stand out – and rankings are an ideal way to get eyeballs – as long as the analysis has at least a veneer of depth to it. There are best places to live, best places to retire, best places to raise a family, best places to start a business, best places for Millennials, best places for immigrants – and that only scratches the surface.

In the new MacLean’s analysis the highest ranking NB municipality – out of more than 400 – ranks only 105. Because the analysis is biased towards fast growth, high incomes and low unemployment rates – a place like NB is disadvantaged out of the gate. In addition, because they split out every small municipality – the regional effects are ignored. For example, a small community with a high income, low unemployment and fast population growth will score high but all of those effects may be driven by the large urban community next door – the latter having higher unemployment, lower average incomes and slower population growth. Obviously the small community is benefiting by being in the orbit of the larger but there is no mention of this fact and no benefit to the larger urban centre for pumping up the rankings of its smaller neighbours.

What should a community do? I caution communities not to fully ignore these kinds of rankings. A few years ago an NB Cabinet minister was asked a question by a journalist and her answer was “we don’t like to compare ourselves to other jurisdictions”. I don’t even remember the issue at play but I remember her response seemed a little bizarre. If you don’t compare how do you know how well you are doing? It’s hard to see anyone or any organization striving to get better at anything if they don’t know where they stand.

My recommendation is for communities to look at rankings like this and all the different attributes that drive the rankings and see if there are ways to improve. There may be things that are out of their control and quite unfair (like the high ranking small community that is scoring high mainly because it is benefiting from the lower ranking larger urban centre next door) but there may be things that are in their control and addressable – walkability, bikeability, green spaces, affordable housing, etc. And for the bigger issues like population growth, income levels, unemployment, access to health care, etc. A fairly robust comparison to other cities/towns – should not be dismissed out of hand.

I’m not sure how widely these kinds of surveys/rankings are used in decisions of where to live, start a business, etc. but it can’t hurt given how widely these things are touted. Just about every community I have worked with will have their laundry list of “best of”. In fact, when she first moved here my wife used to joke about New Brunswick’s inferiority complex – we have the highest tides, longest covered bridge, largest axe, largest lobster, etc. – she never had visited a place that tried so hard to have some kind of trivial world beater in every community. Anything to even slightly capture the imagination of people.

I have said many times that the world is getting more competitive by the day. The competition for investment, talent and ideas has never been more pronounced. New Brunswick and Atlantic Canada need to take this seriously. We need to find our niche (s) in the world and pursue them relentlessly – or we will get swept out with the world’s highest tides – largest axe in one hand and largest lobster in the other.

]]>http://davidwcampbell.com/2017/07/are-you-a-peacock-or-an-ostrich-the-thorny-world-of-community-rankings/feed/0The difference between federal, provincial and local economic development: A primerhttp://davidwcampbell.com/2017/07/the-difference-between-federal-provincial-and-local-economic-development-a-primer/
http://davidwcampbell.com/2017/07/the-difference-between-federal-provincial-and-local-economic-development-a-primer/#commentsSat, 15 Jul 2017 10:56:20 +0000http://davidwcampbell.com/?p=6828Continue reading →]]>If a national government wants to grow and strengthen its economy, it would like to foster:
-More international exports (or import substitution where beneficial)
-More capital investment
-More international tourists
-National population growth
-Innovation and productivity gains

If a provincial government wants to grow and strengthen its economy, it would like to foster:
-More international and interprovincial exports (or import substitution where beneficial)
-More capital investment
-More international and interprovincial tourists
-Provincial population growth – from natural gains, or migration from other provinces or internationally
-Innovation and productivity gains

If a local government wants to grow and strengthen its economy, it would like to foster:
-More local services – particularly import substitution and services that attract people from outside the community
-More international, interprovincial and intraprovincial exports (or import substitution where beneficial)
-More capital investment
-More international, interprovincial and intraprovincial tourists
-Local population growth – from natural gains, or migration from other parts of the province, other provinces or internationally
-Innovation and productivity gains

]]>http://davidwcampbell.com/2017/07/the-difference-between-federal-provincial-and-local-economic-development-a-primer/feed/0NB ICT industry resurgence?http://davidwcampbell.com/2017/07/nb-ict-industry-resurgence/
http://davidwcampbell.com/2017/07/nb-ict-industry-resurgence/#commentsSat, 15 Jul 2017 10:26:54 +0000http://davidwcampbell.com/?p=6823Continue reading →]]>For those of you following this blog you will recall my concern over the state of the ICT industry recently. Its GDP contribution dipped from $921 million (real GDP) in 2011 to $852 million in 2015. In fact, in real terms, ICT GDP in New Brunswick in 2015 was similar to what it was way back in 2007 ($846.4 million). To put that into perspective every other province in Canada saw faster growth in ICT GDP over that period. Quebec’s rose by 23%, Saskatchewan by 24%.

But the NB ICT industry GDP contribution increased by 3.8% in 2016 and, in fact, accounted for 13% of the solid overall growth rate in provincial GDP between 2015 and 2016. Employment also seems to be rebounding (note that in the chart the percentages equal more than 100% because a number of sectors saw a decrease in their GDP contribution such as potash mining which alone reduced provincial GDP by 0.3% in 2016).

Encouragingly there seems to be some firms that are scaling too. Between June 2012 and December 2016 the number of IT firms with between 50-99 employees jumped by seven, the number with between 200 and 499 increased by four and one IT firm jumped into the 500+ category. Not that I exclude the ‘C’ in ICT here as there is one telecommunications firm with 500+ employees (Bell Aliant).

Despite this 1-2 years of encouraging trends, NB’s ICT industry continues to be among the smallest in Canada – tied with PEI and slightly larger than Alberta and Newfoundland – although that is really not a great comparison because Alberta’s overall GDP per capita is substantially larger than New Brunswick. We would like to see an ICT industry that grew in a sustained way for a sustained period of time driving exports growth, attracting capital investment, fostering innovation and providing good employment for young NBers.

]]>http://davidwcampbell.com/2017/07/nb-ict-industry-resurgence/feed/0Fredericton’s engineering cluster: At a fork in the roadhttp://davidwcampbell.com/2017/07/frederictons-engineering-cluster-at-a-fork-in-the-road/
http://davidwcampbell.com/2017/07/frederictons-engineering-cluster-at-a-fork-in-the-road/#commentsFri, 07 Jul 2017 11:22:11 +0000http://davidwcampbell.com/?p=6817Continue reading →]]>There are basically two possible trajectories when a national or international firm buys a local one. They either grow it or they let it whither away until they eventually close it. I have seen this pattern play out many times over the past 25 years for everything from meat packing to e-Learning software.

This came to mind when I read yesterday about the acquisition of what was left of ADI after a previous acquisition several years ago. The acquirer was effusive in its praise of ADI and its technology.

For the most part I have no problem with national and international firms buying up NB firms. It monetizes the value of the firm and the efforts the owners have put in over the years. I’ve seen cases in this province of firms being valued at $10 million or more one year and nothing the next so when owners feel it is a good time to sell I’m not the guy to criticize the decision.

Truth be told a tie-up like this could end up being good for NB. As part of a larger global concern ADI could now expand its global markets leading to more jobs and economic activity here.

But it is also possible – now that the locus of control for the firm has shifted to Pittsburgh – that they will let the Fredericton operation slowly wind down and at some juncture in the future – likely during a period of rationalization – the firm will close its Fredericton office and move some of the top talent to the steel city.

Fredericton saw a cluster of high value engineering firms emerge after WW2 – leveraging expertise built up addressing local market demand (e.g. NB Power) and the surplus of engineering talent pouring out of UNB over the years. The city has one of the largest concentrations of engineering workers in Canada and the value of exports – this is a W.A.G. – of something like $150 million/year.

But now that the cluster is substantially owned by firms based elsewhere – EXP, Stantec, Evoqua, etc. there is a risk that it will decline in the coming years as the international owners downsize their Fredericton offices to just serve local markets. Why have an export-focused operation out of little ol’ Freddy Beach? The air connections are not nearly as good as Toronto, Calgary or Pittsburgh and New Brunswickers aren’t exactly know for their salesmanship.

We need to protect and grow this cluster. Imagine a $150-$200 million export revenue sector with very little government incentives or ongoing support (see the chart). But why would a bunch of people in Pittsburgh, Calgary or wherever care about Fredericton? They don’t and they won’t. We need to make sure the value proposition is so compelling they will see the $$$ by continuing to invest in and grow their Fredericton operations. How do we do this? By ensuring the UNB (and NBCC) talent pipeline is continuing to turn out a surplus of talent. By ensuring this talent has cutting edge skills. Ideally UNB would be engaging these firm in R&D projects that binds them to New Brunswick. And, generally, by ensuring the government influenced business environment remains competitive (taxes, regulations, timing, etc.). And, ideally, the money flowing into NB through these acquisitions should lead to more engineering startups and another wave of new engineering entrepreneurs like ADI and a virtuous economic development cycle continues.

]]>http://davidwcampbell.com/2017/07/frederictons-engineering-cluster-at-a-fork-in-the-road/feed/1The puzzling focus on expanding the number of Atl. Canada exportershttp://davidwcampbell.com/2017/07/the-puzzling-focus-on-expanding-the-number-of-atl-canada-exporters/
http://davidwcampbell.com/2017/07/the-puzzling-focus-on-expanding-the-number-of-atl-canada-exporters/#commentsThu, 06 Jul 2017 12:51:21 +0000http://davidwcampbell.com/?p=6814Continue reading →]]>I’m a big fan of the Atlantic Provinces working together to address challenges we have in common and pursue opportunities where there is alignment of interests. The idea of the Atlantic Growth Strategy is a good one – therefore – but I do find some things puzzling.

For example, the exports development strategy. The provinces and the federal government are going to spend an additional $20 million over five years on export market development with the goal of boosting the value of exports by 30% and double the number of exporters.

The first issue is one of definition. What is an export? Some people define it has international merchandise exports because we get monthly robust data on this type of exports. Some include interprovincial exports which are a huge source of revenue but these exports are harder to track. Most don’t think about services exports – these are also a huge source of export revenue – again just harder to track. How about tourism? Technically speaking tourism is an export sector as it brings money in from outside the province to access a service.

The same challenges apply when we talk about ‘exporters’. Is an NB firm that does construction work in Nova Scotia an exporter? For the feds – unlikely – but for NB export revenue is export revenue.

But based on the data and definitions we do have, I’ll make a few observations.

First, I don’t understand this notion of doubling the number of exporters. This has been part of New Brunswick’s strategy for years and the numbers are going down (see the graph). To double the number would take a roughly 15% growth rate – per year for the next five years. The math isn’t good – $20 million to foster 2,200 more exporters – or less than $10,000 per exporter. It will not happen, period.

Plus it doesn’t matter. One exporter that generates $1 billion in new export revenue is the same as 1000 that generate $1 million in new export revenue (ceteris paribus). Of course this is facetious but not really. There is something to be said for scale – a few large exporters are likely a lot better for an economy than hundreds of small exporters.

The main point here is that goals drive focus. If your focus is on getting 2,200 firms to export more you will put huge time and energy to try and get as many small firms as possible to export more. If your focus was on developing one our two export industries – you could concentrate economic activity. For example, New Brunswick is going hard after cybersecurity. Through startups and the attraction of national and international firms it might end up with 10-15 new exporters within five years – generating $10s of millions in export revenue. But this will only happen with an intensive, focused effort of resources. I’m not sure what the budget for the cybersecurity cluster is but if you include R&D spending, etc. it is in the millions of dollars per year. One mining project – Sisson – will boost export revenue by several hundred million. A 50% increase in business services export revenue (remember it is already a $1.4 billion dollar export industry) would boost exports by $700 million – via a handful of firms. If NB were to attract a Google development centre that would likely drive $10s of millions worth of export revenue.

Finally, I’ve said this a hundred times and likely it will never happen but I think we need to do a better job of alignment – investment, trade, talent, ideas. If we think there is potential to develop a certain region in India across multiple fronts we should put a team in place – in market – with proper resources and political support – and develop that market in an intensive way. Ontario has economic development offices in something like 16 countries, BC, Alberta, Quebec (has 100+ staff in France alone). We in Atlantic Canada have something in the range of 1,500 economic developers (fed, province and local) and they are all (or almost all) located in the region and focused on squeezing a little more juice out of the regional lemon.

If we really want to boost immigration, exports, investment and ideas – we will have to get beyond superficial efforts. Working collectively as Atlantic Canada should provide some scale to do this.

]]>http://davidwcampbell.com/2017/07/the-puzzling-focus-on-expanding-the-number-of-atl-canada-exporters/feed/1Video killed the radio star, Twitter killed the blogger, Twitter killed Twitter… How about LinkedIn?http://davidwcampbell.com/2017/07/video-killed-the-radio-star-twitter-killed-the-blogger-twitter-killed-twitter-how-about-linkedin/
http://davidwcampbell.com/2017/07/video-killed-the-radio-star-twitter-killed-the-blogger-twitter-killed-twitter-how-about-linkedin/#commentsTue, 04 Jul 2017 11:25:43 +0000http://davidwcampbell.com/?p=6812Continue reading →]]>David Jonah convinced me to start blogging back in 2004. Since then I have written 3,463 posts. Likely most of it is crap – with a few nuggets of value along the way.

It’s interesting to see how things have changed in that time. In the early days I would get several hundred readers of a typical blog post – sometimes a thousand or more if it was a hot topic or during an election period when people seemed to be far more active. Then along came Twitter and readers to my blog started to slowly decline. The expansion of social media mostly reduced my readership to a rump of diehards that either liked or hated my stuff. By the way this trend exhibits itself in the comments section. In the early days I could get 100 comments on a popular blog – now it is common to get none directly on the blog itself (a few on social media).

It seems clear to me that people are crumbling under the weight of their social media and stuff like mine falls into the ‘read the headline’ and move on. I can write a 1,000 word blog with tables and charts – and get a few views and a couple of ‘likes’ on social media. If I wrote “Trump is a bum” on Twitter I would get a thousand likes and retweets. I’m not sure what that means but I hope we haven’t reduced our thoughtful media consumption to 140 characters and highly provocative content just because it stands out.

Anyway, along comes LinkedIn. I more or less didn’t think much of LinkedIn until recently – a place you put your resume. But since I started posting to LinkedIn I am getting several hundred hits per post. I assume this is because a) people aren’t crumbling under the weight of trivial posts on LinkedIn like they are on Twitter (I had to stop following some folks because every day it was just a constant stream of anti-Trump posts – from a Nobel prize winner, no less); and b) folks in my LinkedIn ‘network’ would have a more natural interest in the subject matter.

So, video killed the radio star (not really), Twitter killed the blogger and LinkedIn to the rescue. Long live LinkedIn.

]]>http://davidwcampbell.com/2017/07/video-killed-the-radio-star-twitter-killed-the-blogger-twitter-killed-twitter-how-about-linkedin/feed/1Can small North American jurisdictions grow without a significant mining/oil and gas sector?http://davidwcampbell.com/2017/07/6806/
http://davidwcampbell.com/2017/07/6806/#commentsTue, 04 Jul 2017 11:07:05 +0000http://davidwcampbell.com/?p=6806Continue reading →]]>One of the main concerns I have had over the years is whether or not a small jurisdiction in North America can grow its economy in a sustained way without a large boost in mining/oil and gas development. The experience in Canada isn’t very heartening. Among the small provinces – significant growth in the economy over time tends to be correlated to a heavy expansion of mining/oil and gas development – Saskatchewan and Newfoundland and Labrador (before the oil price collapse). The notable exception is Manitoba. As I have written elsewhere Manitoba has embarked on an immigration-led economic growth strategy. PEI has made a smaller attempt at this.

But 10 provinces is a small sample. What about in the US? At first glance the same, disheartening trend seems to hold. North Dakota’s GDP over the past decade has boomed up a cumulative 72% but the mining sector GDP is up 582%. Oklahoma likewise had strong GDP growth but mining GDP is up 86%.

But looking at all smaller states there are some interesting ones. Iowa, Montana, Nebraska, Oregon, South Dakota, Utah and Washington have all witnessed well above GDP growth over the past decade – with flat or declining GDP from mining. How? They are small states, many geographically isolated, etc. Frankly, they look a lot like New Brunswick.

Iowa – It’s growth was led by agriculture, finance and insurance, professional services, accommodation and food services, and administrative services.

A first level read on this is heartening for a place like New Brunswick. We have growth potential in agriculture, too. We have generated considerable export revenue from professional and business services. We have not been as successful with information, education and manufacturing. It’s also interesting that tourism (the proxy industry accommodation and food services) only shows up once as a significant contributor to GDP growth (Iowa). Generally speaking accommodation and food services GDP will track – over time – overall industry growth as it mostly services in-state demand. States with growing tourism sectors will see GDP growth outpacing the overall economy. As the chart shows only one of the states here saw A&F GDP grow faster than the overall economy.

The challenge, of course, comes back to what are the drivers of export-led growth in sectors such as professional services, business services, and even agriculture to a lesser extent. The main driver is talent. Jurisdictions that can’t supply workers to these industries will not see growth. Firms looking to service export markets will not set up and grow in places that cannot supply the talent for growth.

It’s good news that a few small states (and Manitoba!) have shown the way here with strong GDP growth over a longer period of time without the benefit of mining/oil and gas.

]]>http://davidwcampbell.com/2017/07/6806/feed/1Calling Malcolm Gladwell: Walk amongst the elephants in the Atlantic Canada roomhttp://davidwcampbell.com/2017/07/calling-malcolm-gladwell-walk-amongst-the-elephants-in-the-atlantic-canada-room/
http://davidwcampbell.com/2017/07/calling-malcolm-gladwell-walk-amongst-the-elephants-in-the-atlantic-canada-room/#commentsSun, 02 Jul 2017 13:31:57 +0000http://davidwcampbell.com/?p=6801Continue reading →]]>I listened recently to a podcast of a lecture given by Malcolm Gladwell where he mentioned that some people say he is the master of “dumb, obvious points”. He then went on to discuss a dumb, obvious point about something. I think we should have Gladwell come to Atlantic Canada to take a look and discuss our dumb, obvious points. Maybe someone might listen.

For example, take a look at this graph. Since 1991, the population aged 20-44 has dropped by 250,000 across Atlantic Canada – a substantial drop that is more pronounced as the boomers head into retirement. The wave of younger Canadians that powered economic growth in the region for decades crested in 1991 – 25 years ago – and has been receding since.

Take a look at the same graph for Canada. Around 1991 the population aged 20-44 crested – just like Atlantic Canada – but David Foot published his dumb, obvious point about booms, busts and echos and the country cranked up the importation of young talent from abroad. This effort arrested the decline and led to strong growth in this age cohort in the last decade. Interestingly some groups like the Conference Board say this is not enough – that Canada needs to dramatically increase its immigration in the coming years.

There are more dumb, obvious points. Atlantic Canada’s economy is in the midst of substantial upheaval due to demographics, changing industries and increased global competition. We need to be far more focused on internationalizing our economy. Politicians gleefully talk about the level of exports generated from this economy but fail to mention that these exports are still primarily centered on natural resources. If you back out lobster, oil, wood, etc. the region is not particularly good at exporting – with the someone maligned sector – contact centres/business services – as a more than $2 billion export sector for the region.

Here’s another dumb, obvious point – federal government support should align with the region’s needs. In reality it tends to be the opposite. Ontario, Alberta and BC – growing provinces will demand the feds provide cash for public transportation, new roads/bridges and post-secondary infrastructure to respond to rapid population growth. The feds will say sure thing and develop a national program offering cash if you build new public transportation, roads/bridges and post-secondary infrastructure – and you have to put your own money on the table too. So a place like Atlantic Canada will get hundreds of millions of dollars to build new infrastructure even as the population that will use that infrastructure is stagnating or even decline. Why wouldn’t the feds take a couple of hundred million out of that pie and put it where it is needed – to actually grow the population needed to use infrastructure? Because that is not the way things are done in Canada. The feds – Libs and Tories alike- develop national programs based mostly on Ontario, Quebec, etc. requirements (think about the new bias towards large clusters such as AI) and then try to force them to fit in the Atlantic Canada context.

There are certainly many other dumb, obvious points – or elephants in the room – around local government reform, urbanization, new sources of entrepreneurship, how to use our smaller universities to drive R&D, etc. But there isn’t much interest in doing anything substantial about it.

So why not bite the bullet and bring in Galdwell – he probably charges $100k just to show up – and maybe he can make the dumb, obvious points and maybe someone might listen.

]]>http://davidwcampbell.com/2017/07/calling-malcolm-gladwell-walk-amongst-the-elephants-in-the-atlantic-canada-room/feed/1New Brunswick at Canada’s 150th – what will 200 look like?http://davidwcampbell.com/2017/07/new-brunswick-at-canadas-150th-what-will-200-look-like/
http://davidwcampbell.com/2017/07/new-brunswick-at-canadas-150th-what-will-200-look-like/#commentsSat, 01 Jul 2017 11:18:02 +0000http://davidwcampbell.com/?p=6795Continue reading →]]>I am increasingly of the view that New Brunswick and its communities actually spend too much time on introspection. A little introspection – time on the couch – is good. Too much leads to paralysis.

But on a momentous birthday, a little introspection is good. What if New Brunswick’s population had increased just at the national average since 1971? As shown in the graph, we would have 1.06 million population today and the province would look much different than it does today.

The so-called EI dependency problem would have gone way down. People complain about the large number of people who collect EI every year. Well, the number is actually about 35,000 – those who go on EI at some point during the year – on an ongoing basis. Assuming that number didn’t grow by 2016 it would only represent about 6.4% of the labour market in 2016. In other words we would grow our way out of the EI problem. Don’t forget there are nearly 100,000 people that collect EI every year in Ontario (and 156,000 in Quebec). Why no one is blowing their top about all the lazy Ontario-ians is that the 100,000 EI users is out of a labour force of 7.5 million. If we had witnessed just our share of Canada’s population growth since 1971 we would have significantly reduced the EI dependency issue through growth alone.

Urban growth would have been much more robust. Most net new population growth in Canada occurs in urban centres so it is safe to say that a large share of the 305,000 lost population growth would have occured in places like Saint John, Edmundston, etc. Remember Saint John back in the early 1970s had projected a regional population of 250,000 by now – not far off where it likely would have been if we had attracted our share of Canada’s population growth.

It is likely that government spending would have been more sustainable. This is not a given as governments tend to use the dividends of growth to spend more. Alberta, Saskatchewan and Newfoundland and Labrador have the highest per capita provincial government spending as a result of their boom years. Back in 1990s SK and NL spent about the same as NB on a per capita basis now they are 16% and 27% higher respectively.

Our demographic situation would be much stronger. Canada’s median age is 10% younger than NB – in demographic terms that is a big difference.

Finally, this level of growth would have assumed a strong and sustained level of immigration over the 45 year period. A rough estimate would suggest about 23% of our population would be landed immigrants rather than the 5-6% it is today. I think this would have enriched our province over the period.

Why does it matter? The Self-Sufficiency Agenda back in 2007 called for population growth of 100,000 by 2026. We are 2017 and the population has barely budged. Twenty years ago the est. population was roughly the same as it is today. Canada, just in case you are wondering, added 6.4 million to its population over the same period.

Looking forward to Canada 200 there are basically two trajectories for New Brunswick. Either this province will have a much larger population or it will have merged with NS and PEI and will be a rump of its former self.

]]>http://davidwcampbell.com/2017/07/new-brunswick-at-canadas-150th-what-will-200-look-like/feed/0Distracted by a lack of older NBers learning French? This is a bigger problem:http://davidwcampbell.com/2017/06/distracted-by-a-lack-of-older-nbers-learning-french-this-is-a-bigger-problem/
http://davidwcampbell.com/2017/06/distracted-by-a-lack-of-older-nbers-learning-french-this-is-a-bigger-problem/#commentsFri, 30 Jun 2017 15:00:56 +0000http://davidwcampbell.com/?p=6792Continue reading →]]>I am somewhat wary of dipping toe into any conversation about bilingualism in New Brunswick because, well, just because. I am sure that a lot of readers are nodding their heads in agreement.

Anyway instead of worrying about why more English NBers are not taking up language training later in life we may want to worry about one of the real challenges. It looks like, somewhat ironically, that French immersion graduates are more likely to leave New Brunswick than English only graduates. The following table is taken from the 2011 NHS. The bar here is quite low – persons are asked if they have knowledge of French. Presumably, virtually all graduates of French Immersion would answer yes to this question.

I don’t know the exact percentage of NB anglophone students in immersion but it is fairly high around 1/3 of total students (the table below aligns with this). High enough that it should have, over time, a significant impact on the numbers.

But if you look at the data – young anglo NBers in school have ‘bilingualism’ rates in the 30%+. Then it steadily declines to basically 20% in the 30-49 age group and reverts to the provincial average for all age groups for people 40+. Back in 2000, 32% of Anglos were enrolled in French Immersion. Someone who graduated high school in 2000 would have been nearly 30 by the time of the 2011 NHS.

Now before you get out your calculator – my math on this is fairly simple. If kids in French Immersion are showing bilingualism rates of 33% – then you would think that this level would hold – dip a bit from inward migration, etc. but the fact that 33% claim knowledge of French when they are 18 and only 21% do by the age of 30 looks like to me that we are exporting a fairly significant share of bilingual anglophones. The conventional wisdom is that unilingual anglos have to leave because they don’t speak French. It looks like the opposite is taking place.

If we want to foster a bilingual society – at least at a conversational level – we more anglophones speaking French. The best time to learn is during school. If we lose them after then…..

]]>http://davidwcampbell.com/2017/06/distracted-by-a-lack-of-older-nbers-learning-french-this-is-a-bigger-problem/feed/0Fostering startups among dominant industry supply chainshttp://davidwcampbell.com/2017/06/fostering-startups-among-dominant-industry-supply-chains/
http://davidwcampbell.com/2017/06/fostering-startups-among-dominant-industry-supply-chains/#commentsFri, 30 Jun 2017 11:07:22 +0000http://davidwcampbell.com/?p=6784Continue reading →]]>In October 2016, an old friend of New Brunswick Tim Coates partnered with one of the best researchers on what it takes to be a successful entrepreneur, Daniel Isenberg, on an important piece of analysis. Published in the Harvard Business Review, the pair found that many of the most successful startups can be found in large corporation supply chains. This was an interesting finding as a lot of the better known startups actually service end markets – think Uber, Airbnb, etc.

Another deep thinker, the estimable Dr. Herb Emery at UNB, made an almost throw away comment in a talk he gave recently. He said that historically – and he meat this in the literal way – most startups occur in a region’s dominant industries. If you have a large agricultural sector, entrepreneurs will rise up to address a market need locally and then take that innovation to national and international markets.

An an example, look at the agricultural implement manufacturing sector. If Emery is right there would be a significant correlation between the size of the agriculture sector and the number of firms in NAICS 333110 serving this industry. In fact, this is correct. Ontario generates $4.4 billion worth of GDP from agriculture (direct) and has 83 firms serving the industry in NAICS 333110. There are two adjacent counties – Waterloo and Wellington – that are home to nearly 10% of all the NAICS 333110 firms in Canada (there may be a Mennonite tie-in here but that is beyond my scope for today). There are two counties in Manitoba that are also home to 10% of the national total.

Just to allay your fears that these firms are just a few Mennonites building their own scythes, take a look at the export data. As with the firm intensity, international export intensity is correlated to provinces with large agricultural sectors. The data in the table is shown in $Millions just in case you are wondering. So the Emery-Coates-Isenberg thesis seems to hold.

Now, we turn our attention to NAICS 333245 – Sawmill and woodworking machinery manufacturing. As you would expect there are lots of firms in this sector in BC, Quebec, Ontario as those provinces have large forest products sectors. But the outlier here is New Brunswick. Even though the province has a very large forest products industry it has only one firm in this part of the supply chain. If it had its ‘share’ of the national total it should have closer to 5 – or 5x as many as it does. For those of you who are curious the exports profile fits the pattern. Ontario generates $131 million, Quebec, $75 million, BC $44 million and NB $1.2 million from this sector.

Again, this isn’t really a ‘small’ versus ‘big’ province issue. In the agricultural implement manufacturing sector Manitoba and Saskatchewan are home to 36% of the national total even though they are ‘small’.

Bottom line? We need to put more brainpower to this issue. Why are we not seeing innovative startups in our dominant industries such as forest products, seafood processing, blueberries, maple syrup, contact centres, etc.? Don’t get me wrong there are some notable exceptions – Remsoft comes to mind – but we need to see more.

How? It is already beginning. McCain Foods has a new initiative to deliberately work with startups to help address its big challenges and drive productivity. Resson Aerospace is a good example here. We need the rest of NB’s large firms to step up and think about how external startups could be part of the solution to their business challenges.

It’s a win-win. The firms can access an innovation sandbox that would be almost impossible to replicate internally. The startups get access to local markets – to get really good at something they can then take into global markets.

Where do the entrepreneurs come from? That is broadly a subject for another day but they should be spinning out of the large firms themselves (restless), emerging out of universities (IP) or being attracted to New Brunswick to take advantage of a market need.

This should be part of New Brunswick’s startup ecosystem 2.0. Over the last decade the infrastructure to support startups has ballooned but IMO there has been limited focus on how to align this with our big sectors and the Herb Emery wisdom.

]]>http://davidwcampbell.com/2017/06/fostering-startups-among-dominant-industry-supply-chains/feed/0The unemployment and education gap between young men and young women is wideninghttp://davidwcampbell.com/2017/06/its-not-raining-men/
http://davidwcampbell.com/2017/06/its-not-raining-men/#commentsMon, 19 Jun 2017 11:14:26 +0000http://davidwcampbell.com/?p=6771Continue reading →]]>Back in the 1980s Tom Peters was among the first thinkers to suggest that women would rule the knowledge-based economy of the future. I recall he said something about men being good for heavy lifting or something similar to that.

We talk a lot about income parity, fairness, expanding opportunity, etc. but we are rarely talking about men. And for good reason. Men still earn a fair premium over women – even when adjusting for age and occupation – although when adjusting for occupation the numbers are improving.

But there is a specific challenge with men and at some point we will need to talk about it. The unemployment rate among young men (all men really) in New Brunswick is starting to decouple from the rate for young women. The unemployment rate among women aged 25-44 dropped to 6.7 percent in 2016 and is now at historic lows across the province. For men, however; the unemployment rate has been rising and now sits at over 12 percent.

Another way to look at this is the spread between the unemployment rate for men versus women. In 1990, the unemployment rate among young men in NB was actually a hair lower than for women but it now sits at 80% higher. Specifically, the share of the male labour force that was unemployed in 2016 was 80% higher than the share of the female labour force that was unemployed.

The challenge is particularly an issue among New Brunswickers without a university degree. The unemployment rate and spread between men and women with a university degree is much lower (men 4.6%, women 3.5%).

What is going on here? We will have better information to work with in the Fall when the new Census data is released but it looks like there are not enough jobs for non-college or university educated men – or more specifically men are not particularly interested in the jobs on offer that match with their education level and income expectations. Take a look at the changing income profile of men in the following table. There has been a steep decline in the number of young men reporting earnings of less than $50,000 per year between 2004 and 2014. while there has been an even sharper decline in the number of young women reporting less than $25,000 in annual income there has actually been robust growth in the number reporting between $35,000 and $50,000 – while among men this cohort too is in significant decline.

So, the number of men earning $50k and up is up robustly but down significantly for those earning less than $50k. Incidentally among the relatively rare group of young people earning over $100k/year – young men still significantly eclipse women. Between 2004 and 2014 the number of men aged 25-44 earning $100k increased by over 5,000 while increasing only by 1,220 among women in the same age group.

I’ll leave you with one last chart on this. In the 1990s the number of university educated men and women aged 25-44 in the labour force was roughly equivalent. In the last decade or so it has started to seriously decouple. In this age group there are now 64% more women with university degrees in the labour market than men.

A growing spread in unemployment between men and women and a growing spread in the education level between men and women is probably something we should keep our eye on.

]]>http://davidwcampbell.com/2017/06/its-not-raining-men/feed/0Immigration-to-atlantic-canada-for-dummieshttp://davidwcampbell.com/2017/06/immigration-to-atlantic-canada-for-dummies/
http://davidwcampbell.com/2017/06/immigration-to-atlantic-canada-for-dummies/#commentsThu, 15 Jun 2017 12:36:11 +0000http://davidwcampbell.com/?p=6764Continue reading →]]>Since I didn’t get my invitation to speak to the parliamentary committee studying immigration and Atlantic Canada even though I probably have analyzed more data on this than just about anyone else, I’ll give you my thumbnail analysis of the issue here.

New Brunswick (and for the most part Atlantic Canada) hasn’t had a ‘wave’ of immigrants – i.e. an amount that significantly impacted population levels – since the mid 19th century. This needs to be front and centre in the conversation. Integrating new immigrants into existing strong immigrant ecosystems (i.e. the large urbans) is easier. Integrating immigrants into western Canada – which built much of its current population on inward migration is easier. Integrating new immigrants into Atlantic Canada with no recent history will be harder and will require significant community-level focus. I have suggested that every immigrant family should be paired with an NB family for at least a year to help integrate them into the community.

New Brunswick has a long history of little interest in attracting immigrants. After WW2 Canada accepted a wave of new immigrants – mostly from Europe. I read an academic paper on this recently that stated the NB premier at the time said he didn’t want more immigrants to New Brunswick because of that old canard about ‘unemployment’ here. This could have been the largest single misstep in NB history. The example across North America is clear – communities with sustained immigrant flows tend to have lower unemployment rates. Our preoccupation with seasonal industries-EI-inflated unemployment has distorted the conversation on immigration. I believe if we had put a greater focus on immigration it would have led to fewer young people leaving the province.

Immigrants are essentially the only source of labour force growth across the country. Between 2010 and 2016 the Canadian labour force expanded by just under 900,000 and 823,600 were landed immigrants. In provinces such as New Brunswick the born in Canada workforce has been in decline for multiple years. I can’t see any way to boost the provincial labour market without a dramatic expansion of immigration.

Immigrants will be more mobile than entrenched, multi-generational Canadians. Get used to it. Interprovincial mobility rates rose when Manitoba started to significantly expand its immigration a decade ago. We can’t obsess over this. I found out this week that two of my favourite immigrants were leaving – both to western Canada. This is a reality. They don’t have the anchors here that many of us have. We can and should do more to anchor them here – networks, schools, churches, etc. but we shouldn’t use this as an excuse to not attract immigrants. We just need to ensure that we have two coming in for every one that leaves. And this excuse that we will flood Toronto with immigrants is pathetic. The broader Toronto region attracts nearly 100,000 immigrants per year. Any residual coming from Atlantic Canada would be a rounding error.

Don’t obsess with ‘young people leaving’. We encourage a large share of young people to go into university even as there are thousands of new jobs every year that don’t require university degrees – manufacturing, natural resources, services, etc. That’s okay but don’t expect them all to stay in New Brunswick. If you want university educated folks to stay you need a) a growing economy that is creating more local market-focused university education requiring jobs (dentists, nurses, lawyers, accountants, etc.); 2) an economy that is created more university education requiring export-focused jobs (engineers, computer programmers, designers, etc.) or 3) an economy where young educated people are starting new firms. Other than that let ’em leave. I find the people I meet that have spent a few years outside New Brunswick bring back valuable knowledge and perspective. In fact, I would like every New Brunswicker to spend at least a year living outside the province.

Focus immigration efforts on attracting family and friends of existing immigrants. This should be a no brainer. As the fed speed up processing times for family class immigration nationally this will have little impact here because we have very few immigrants to begin with. We should encourage the clustering of immigrants (not the ghetto-ization of new immigrants – big difference) and design our immigration programs to encourage/incentivize this.

Dramatically boost international post-secondary students – particularly in occupations that could be used to grow export industries. Someone told me recently that UNB Fredericton has more engineering graduates living outside New Brunswick than living and working in-province. They were critical of this. Why? Fredericton has one of the highest concentrations of engineers in Canada and a 40% export rate. I say over-enrol and over-graduate people in key occupations such as computer programming, engineering, etc. and if some leave – who really cares? Many will stay. Many entrepreneurs will take advantage of this labour pool to start firms. Worst case. The kids stay here during school and spend, on average, $25,000 per year in our province. And for immigrant students, they get to spend 2-4 years putting up with our winters. If they survive they are good candidates to stay longer term.

Set hard targets. There is a lot of wishy-washy on this which surprises me. I can line up a number of economists that would say if you want to grow the Atlantic Canada economy in a sustainable way over the next couple of decades we will need to bring in at least one percent of the population each year as immigrants (Manitoba is running around 1.5% and the have the fastest GDP growth in the country). Just do it. Set a target of 7,500 to 8,000 for New Brunswick and then work backwards to figure out the resources needed to make that happen.

Tie new immigrants to actual jobs. This is a bit counter-intuitive to my previous arguments but hear me out on this. If you bring immigrants on a point scale that rewards highly educated immigrants but isn’t aligned with the needs in the labour market – that is a recipe for outward migration. If we need home care workers, assembly line workers, truckers, contact centre agents, fish plant workers, etc. bring immigrants with the skills and aptitude to work those jobs. Pay them a competitive wage and they are far less likely to leave because they would end up in a similar job at a similar salary in Toronto but in a higher cost of living environment. Now, I’m not suggesting New Brunswick should go out and actively attract firms with ‘low wage’ jobs to move here but we need to ensure the NB labour market is meeting local demands – particularly for export-focused industries. We can and should focus our growth efforts on higher wage jobs, entrepreneurship and other high value areas that should attract and retain immigrants (and NBers).

Reorient economic development from financial support for SMEs to talent attraction. The feds gave Atlantic Canada the immigration pilot (thank you) and then said but there is no new money for these immigrants (huh?). Normally the feds provide a cash payment per immigrant to fund things like settlement services. But not this time. This is an oversight. Both federally and provincially we need to divert significant spending to talent attraction. ACOA should become 50% a talent attraction agency. Our provincial efforts should move significant dollars towards talent attraction and retention. We talk a big game but until we put our money where our mouth is we will get limited results.

Finally, the federal government needs to fundamentally rethink this. They may be still sore from the snub in the mid 1940s. Imagine. Back then the feds were begging us to take more immigrants. Now the attitude is the opposite. If the feds want a prosperous and sustainable Atlantic Canadian economy they need to work with us on a serious plan to attract and retain more immigrants here – entrepreneurs, skilled workers, not-so-skilled workers, post-secondary students, rural, urban – across the board. There is zero value to Canada – and its social cohesion in the coming years – to have one region of the county withering away for no good reason. Atlantic Canada has underpopulated urban centres, lots of wide open, rural areas, fallow farmland, lots of minerals and other natural resources. It’s very easy to start a business here. There are no real structural reasons why we could not see a wave of new population. EI? Get over it. I have heard this excuse for 30 years and I am tired of it. If the feds want to massively reduce the number of people that use EI every year in New Brunswick then change the program. If not don’t turn around and beat us over the head with it as a reason not to attract immigrants.

]]>http://davidwcampbell.com/2017/06/immigration-to-atlantic-canada-for-dummies/feed/0The bonfire of my vanitieshttp://davidwcampbell.com/2017/06/the-bonfire-of-my-vanities/
http://davidwcampbell.com/2017/06/the-bonfire-of-my-vanities/#commentsSat, 10 Jun 2017 11:24:33 +0000http://davidwcampbell.com/?p=6754Continue reading →]]>My working hypothesis for the past 20+ years has been that New Brunswick could be a place that achieves strong economic growth, boosts its population, has dynamic urban centres and strong rural economies. The problems, it seemed to me, were surmountable. We just needed to work on a few fundamentals – boosting population through immigration, attracting more global investment, fostering more high growth potential entrepreneurs, getting the federal government to see the region as a potential source of growth rather than a headache to be managed, etc. All we had to do would be agree on a few key principles and then drive those principles for 10, 15, 20 years. In my view the McKenna years could have been the springboard for a growth agenda. And why not? The province is vastly underpopulated relative to its potential. We could easily accommodate 1.5 million in New Brunswick without breaking a sweat. Growth in Atlantic Canada in general would be good for the country as it would show that all areas have the potential to grow and would bind us better as a nation because simmering resentments would be tamped down.

Bu the truth of the matter is that after 2+ decades of study maybe my working assumption may have been wrong all along. Maybe there is something that is fundamentally holding New Brunswick and the Atlantic region back. I have read just about everything published on the subject such as Donald Savoie’s tomes, Hal Frederick’s work on the efforts in the 1950s, etc. But we can’t escape the data. The fact is that despite all the dollars invested, all the plans, all the rhetoric, successive rounds of dewy-eyed federal and provincial politicians the numbers are just getting worse. Savoie’s Visiting Grandchildren has data going back to the 19th Century but I’ll just take you back to the 1950s. Using population growth as one overarching indicator, it has just been getting worse over the decades. In the 1970s New Brunswick’s population growth approximated that of the country as a whole. Depending on who you talk to and how cynical you are there are several explanations for why population growth collapsed here in the 1980s, 1990s, flatlined in the 2000s and is slipping into outright decline now and forecasted to continue into the 2020s and 2030s.

The title of this blog is deliberate. When I got hired on at GNB 2+ years ago I was wooed in by the idea that I could implement all my great ideas about economic development. I’d be like Moses with the tablets coming down from the mountain. It didn’t quite work out like that. Don’t get me wrong. Many of my ideas – from the need to focus on specific opportunities, to the need to have a rigorous approach to ROI on economic development spending to the need to radically boost the population through immigration are reflected in the new economic growth plan and I had a hand in the crafting of a cross-departmental approach to economic development that didn’t exist before. But it’s clear to me that the provincial government is only one actor on the stage and because of our political system – democracy – it’s direction and focus is heavily influenced by the other actors.

I’m going to continue to ply my trade helping communities, industries and governments foster the conditions for growth and prosperity. I remain convinced that a weak, aging New Brunswick with stagnant economic growth and declining population will be no good for the people here and no good for the country as a whole. I’m not sure we will go over the cliff but I can see us stumbling along for the next 20-30 years doing the same old things and getting the same old results.

A lot of folks talk about inevitability. That Atlantic Canada is doomed by history, by geography, by culture, etc. to underperform but I’ve never bought that argument. If you look at the United States many of the states that have led the country for growth have the worst so-called fundamentals. You can’t tell me that Idaho, Nevada, Wyoming are somehow fundamentally better positioned than a place like New Brunswick.

A little introspection once in a while is good. Too much introspection can lead to paralysis.

I still think the fundamentals for a growth agenda are relatively easy to articulate. We need to find New Brunswick and Atlantic Canada’s place in the global economy. We need to attract a lot more people, investment and ideas. If I was Francis McGuire I’d fundamentally transform ACOA into the agency that positions Atlantic Canada in the world rather than provides banking services to small and medium sized businesses. I’d have multiple international offices (just like Quebec, Ontario, Alberta, BC have) working on trade, investment, talent attraction, institution-to-institution relationships, business-to-business linkages, etc. I’d put talent attraction on the same level as investment attraction or small business support. The vast resources aimed at trying to squeeze a little more economic juice out of the NB lemon I would reorient towards attracting more lemons (re: oops that may not be the best analogy, sorry about that). Instead of setting up all this startup incubation/acceleration infrastructure and then hoping a few NB entrepreneurs will stumble through the doors I’d go far and wide to attract some of the best minds with the best ideas to move here. We want to be a world leader in the Smart Grid? Let’s go around the world – to Spain, to Romania and to China and find those Phd students working on the coolest ideas and let’s woo them here to Shukla’s Energia Incubator at UNB.

We all caught up worried about the young people that leave our region. We use it as the excuse to not attract immigrants. This has been our fatal conceit. Between 2010 and 2016 the Canadian labour market has swelled with a crush of new immigrant workers- more than 830,000 – of which New Brunswick eeked out growth of 3,300 which was more than offset by the decline of New Brunswick born labour market participants.

And which province led the country in economic growth? The province that had the foresight a decade ago to dramatically boost its immigrant numbers.

Anyway, I come back to the prediction I made more than a decade ago. On our current path you can expect the federal government to set up a “Royal Commission on the Future of the Maritime Provinces” somewhere around 2026. It will be headed by an Octogenarian Frank McKenna who will conclude the region needs to amalgamate and radically centralize public services in a few urban areas. It will be the strategy to best manage the region’s decline.

I think there is still time to avoid the McKenna Octogenarian Royal Commission but I’m not sure the will is really here to get it done.

]]>http://davidwcampbell.com/2017/06/the-bonfire-of-my-vanities/feed/2Expanding Riverview’s role as a air traffic control centre (?)http://davidwcampbell.com/2017/05/expanding-riverviews-role-as-a-air-traffic-control-centre/
http://davidwcampbell.com/2017/05/expanding-riverviews-role-as-a-air-traffic-control-centre/#commentsSun, 28 May 2017 11:07:25 +0000http://davidwcampbell.com/?p=6750Continue reading →]]>For those of you unfamiliar with Riverview, New Brunswick, some of the nicest homes belong to the folks working at the NAVCAN Flight Information Region. There are five of these across Canada. Ever since I moved back to New Brunswick in the early 90s there have been rumblings of the potential closure of Riverview – it is supposedly the smallest of the five. Here is what NAVCAN says on its website about the Riverview centre:

“Moncton FIR is an ideal place to work – with reasonable travel to sites, a variety of equipment which keeps the job dynamic, and a great group of people who have a vested interest in your career.”

There was an excellent article in The Economist this week about the movement of control tower activity away from having one at each airport to centralized monitoring activity remotely. Norway apparently is consolidating a lot of activity in a small, northern centre that will remotely monitor airports across the country.

In Canada, ‘consolidation’ usually means closing places like Riverview and moving the work to a larger centre. We have seen it with hotdogs (Maple Leaf) as well as government services. There is no reason why ‘consolidation’ couldn’t mean closing facilities in large centres and moving the work to smaller centres – particularly for work that isn’t geographically sensitive – but this doesn’t seem to work out much.

Anyway, it would be interesting to understand what is going on in Canada – will control towers be closing in favour of remote monitoring? If so, could a place like Riverview be expanded to handle activity from across the country? Or will this be just another example of a national organization – public or private – think CN Shops – closing here and moving the work to Ontario or Quebec?

]]>http://davidwcampbell.com/2017/05/expanding-riverviews-role-as-a-air-traffic-control-centre/feed/0Nudging the invisible hand – just a tiny, little bit.http://davidwcampbell.com/2017/05/nudging-the-invisible-hand-just-a-tiny-little-bit/
http://davidwcampbell.com/2017/05/nudging-the-invisible-hand-just-a-tiny-little-bit/#commentsFri, 05 May 2017 09:51:20 +0000http://davidwcampbell.com/?p=6747Continue reading →]]>For those of you who think I’ve gone all Mariana Mazzucato on you and think government should become a market maker – relax, but I do believe government can be a market nudger.

As I have written about many times I am a big fan of markets. When working well they can be remarkable as arbiters of price, quality, supply and capital allocation. I’ve written whole articles on the ‘pizza’ market. It has small, medium and large firms. It has local, national and international firms. It has firms priced at the low end (Little Caesars) and the high end (Piatto in Moncton) and it has a wide range of specialities from the bland to the highly niched. It features easy of entry and exit. There are firms that make lots of profit and can accumulate wealth and there are firms that go out of business within months of opening. And there isn’t much government involvement beyond food safety and some control over access to certain inputs such as industrial cheese.

But the assumption that somehow all markets are infallible is just not correct. What I mean by this is that we kind of assume that if there is a market opportunity in a local area that enterprising entrepreneurs will be there to fill it. The reason there are no hot dog stands in Fredericton is that there is no demand for hot dog stands. The reason there is no river boat operating on the Saint John River (inside joke) is that there is no demand for a river boat. The reason there is no dentist office in Minto (I’m not sure about this) is that there is no market for dentistry in Minto.

I disagree and have come to the conclusion that one of the central roles of ‘economic development’ – whether practiced by governments, chambers of commerce, industry groups, etc. – should be to shed light on potential entrepreneurial opportunities. Not set up and run businesses. Not provide outsized subsidies to set up and run businesses. But to frame potential opportunities – particularly those with strategic value – and then make those opportunities known to entrepreneurs and business that could take advantage.

We do that a little already. Opportunities New Brunswick is out trying to convince national and international firms that there are ‘opportunities’ to set up in New Brunswick and take advantage of a competitive advantage such as the cost environment, geography, a natural resource, etc. but beyond that we do very little. Most of what we call economic development is helping existing firms – with grants, loans, etc.

For example, if a firm in Taymouth thinks it has a product that it can sell into international markets we will give it grants and loans (ONB, ACOA, CBDC, BDC, EDC, RDC, and other acronyms) to help it get into those markets. But we give very little thought or focus to where the entrepreneurs come from in the first place. That is up to the ‘free market’ – I’m told.

Now the usual retort to my argument here is that how can government be good at picking entrepreneurial opportunities? To many that is like fingernails on a chalkboard (Millennials – Google it). In fact, this is not exactly what I am proposing here.
Let me give you a concrete example. New Brunswick is now the second largest producer of wild blueberries in the world. We have made enormous progress on farm productivity – we have allocated a lot –more Crown land – and we have seen a large expansion in blueberry production to the point we have an oversupply and will be curtailing production.
As far as I can tell there has been significant effort to expand the number and scope of farmers but virtually no effort to foster other types of businesses in the sector – in the supply chain and in the use of the product (other than the attraction of a large scale freezing and storage capacity). Where are the startups? Where are the firms taking blueberries and transforming them in to value added products? Nutraceutical uses? Industrial uses? Where is the commercial kitchen to allow potential startups to test their blueberry-based food products? Where is the university research into the antioxidant properties of blueberries and the tech startups arising from that research? Are there ways to harness the properties of the blueberries as a natural sweetener?

In my view someone – some entity – should be at least shining the light on potential opportunities and exposing those opportunities to potential entrepreneurs. Think of it as a trade show for New Brunswick blueberry entrepreneurial opportunities.

Now, again, to many of you this is a bridge too far for government. This should be the role of private industry or at least industry groups. Maybe so. But where are they? There is a very strong public interest in New Brunswick developing an economic cluster around our blueberry sector. We have a microclimate and environment that is ideally suited to wild blueberry production – there are few locations in the world as attractive as New Brunswick. We can’t passively sit back and hope that entrepreneurs from far and wide will figure it out.

I would infuse this approach across our economic development – local, provincial and national. If Minto needs a dentist because everyone has to drive into Fredericton and pay the premium in time and money to do so – I would contact all the dentist offices in Fredericton and see which one would be interested in setting up a satellite office in Minto. Minto would get the economic benefit of that office and residents would have the convenience. Unless someone actually works on this it may not happen in a Darwin-like fashion.

]]>http://davidwcampbell.com/2017/05/nudging-the-invisible-hand-just-a-tiny-little-bit/feed/1India: Investment, exports and talent all in one package?http://davidwcampbell.com/2017/03/india-investment-exports-and-talent-all-in-one-package/
http://davidwcampbell.com/2017/03/india-investment-exports-and-talent-all-in-one-package/#commentsSun, 26 Mar 2017 11:07:37 +0000http://davidwcampbell.com/?p=6742Continue reading →]]>There are few countries that are the whole package. If a jurisdiction is looking to attract investment (or firms that want to invest there) it is normally richer countries such as the U.S. If a jurisdiction wants to develop export markets for its products and services it may not be the same target as investment markets (say potash for the Brazilian market – although that example is one that makes me swallow hard). Finally, if a jurisdiction wants to attract talent – workers or entrepreneurs – it may not be the same markets as either investment or export markets. For example, Romania, Morocco and the Philippines may be ideal markets for talent attraction but not necessarily investment or export market development.

India, it seems to me, provides the trifecta. Indian IT outsourcing firms are placing tens of thousands of workers from India into the United States using the H1B visa program. Now that program is under threat – at least at a high level making Canada look more attractive. Indian firms are also a significant source of investment (think AV Birla and its investment in NB forest products mills). Finally, Indian firms that potentially set up in New Brunswick wouldn’t be doing so for local markets – but as a location to develop export markets. We have spent decades trying to develop Asian export markets but to little avail.

But when AV bought two mills in New Brunswick exports to Asia rocketed by more than 8x. If Indian IT outsourcers set up here they too will significantly boost our export revenue.

The challenge, of course, is that many jurisdictions realize this so the competition for Indian talent and investment is substantial. Small jurisdictions need to figure out if they can find niches to exploit in highly competitive markets or whether they should focus on less lucrative but less competitive markets. NB has already attracted one small IT firm from eastern Europe – there may be many more looking to set up in North America but that are nervous about the US of A at this time.

But we need to give India the good ol’ college try. The opportunity is too great to pass up.

]]>http://davidwcampbell.com/2017/03/india-investment-exports-and-talent-all-in-one-package/feed/0New Brunswick: Nearly 1/5th into a New Centuryhttp://davidwcampbell.com/2017/03/new-brunswick-nearly-15th-into-a-new-century/
http://davidwcampbell.com/2017/03/new-brunswick-nearly-15th-into-a-new-century/#commentsSat, 18 Mar 2017 20:55:07 +0000http://davidwcampbell.com/?p=6734Continue reading →]]>As I get older I realize there actually isn’t much that old people have on the young. These days skills can be acquired at lightening speed, many young people have figured out the importance of networks in a way that most in my generation did not. There is one thing that age brings that is hard for the young – perspective. You can read about events all day long but that is not the same as living them. Characterizations of the ‘Moncton Miracle’ by the young today do not have the same texture as those served up by David Jonah or others that were actively involved at the front end in the 1980s.

Recently while cleaning out old files I came across a hard copy of this McKenna era report (New Brunswick at the Dawn of a New Century) on demography and how it would impact the province in the years ahead.

There are a few fun facts in this report. It states, for example, that the per capita costs for publicly funded health care in New Brunswick for those 85+ was a shocking $477 in 1995 – more than double (!) the overall per capita costs. According to the Bank of Canada inflation calculator $477 in 1995 would be the same as $713 in 2017. Guess how much the per capita costs for 85+ health care are today? Depending on your data source – around $12,000 per 85+ person. Don’t even think about projecting this growth rate out over the next 20 years or you will be immersed in a Richard Saillantian world of cliffs and cleavages.

But what is most striking is what is not said in this report. They set up a select committee of the Legislature – delve into the big issues – the global desire to moderate or reduce population, the fact that Canada will need 500,000 immigrants per year by 2030 – a target by the way we are well on the way to hitting nationally – all of the major drivers of New Brunswick’s demographics – and then virtually no recommendations – only vague statements about need to come up with innovative solutions, etc.

In the 1995 Throne Speech, McKenna stated “dramatic demographic changes are ahead, creating risks for the unprepared and opportunity for the far-sighted” and “New Brunswick will be ready for the twenty-first century.”

I can’t help thinking as my mother used to say “there is many a slip between the cup and the lip”.

]]>http://davidwcampbell.com/2017/03/new-brunswick-nearly-15th-into-a-new-century/feed/0The importance of skin in the gamehttp://davidwcampbell.com/2016/12/the-importance-of-skin-in-the-game/
http://davidwcampbell.com/2016/12/the-importance-of-skin-in-the-game/#commentsSat, 31 Dec 2016 13:09:56 +0000http://davidwcampbell.com/?p=6724Continue reading →]]>I’m not sure where this term, skin in the game, comes from – I won’t google it because I may not like its origin but I do like the concept. I think it applies to economic development here in New Brunswick. Nassim Taleb – the black swan guy – co-authored an excellent paper on the general theory of skin in the game back in 2013. I think he is coming out with a book on the subject soon.

New Brunswick has an economic development problem. It’s economy is growing very slowly (on average, 0.5% per year since 2008), employment is declining and investment is flat. Productivity remains a key challenge. Why does this matter? Can’t we just limp along as a province for the next 2-3 decades until we get beyond the Boomer demographic hump?

I’m not sure. The premise behind the idea of Canada is that rich provinces will cover the shortfall in poorer provinces and every Canadian will have good quality public services and public infrastructure at reasonably comparable levels of taxation. In an increasingly competitive world the ‘rich’ provinces (think Ontario) are facing their own heightened competition for investment, talent and ideas.

In my view, the best approach moving forward is for each province/region in Canada to buckle down and build an economic agenda that focuses on a substantial increase in the inward flow of migrants, high growth potential entrepreneurship and economic opportunities for which the region has a strong value proposition.

This brings me to the skin in the game concept as it relates to economic development. I believe that industry groups, municipalities, and other actors need to put skin in the game and work with the provincial and federal governments on the growth-focused economic agenda. It’s easy to blame government when things go wrong. And government needs to shoulder some of the blame. But if we really want industries and communities that thrive, we need a collaborative approach where each stakeholder plays a role based on its strengths. Government has things it does reasonably well and others that it doesn’t. This vision of government as a bank for industry that gives cash and then ‘gets out of the way’ is not going to get it done.

So, we need municipalities, industry groups, universities, not-for-profits, etc. to put skin in the game. Some of the most inspiring stories I have heard in the past year have been community-level efforts to foster economic development. St. Stephen comes to mind with its wildly ambitious goal of adding 1,000 people to its population within a decade. Transport yourself to 2025 to see how St. Stephen envisions its future.

The provincial government is trying to seriously evolve how it approaches economic development putting much more emphasis on the factors that drive long term economic success – the talent pipeline, infrastructure, innovation, focusing on areas of strength and we need our partners to step up to the plate too. We should be well beyond the old NB value proposition of lower costs and lots of available young workers (the value proposition circa 1990). We now need to be a place (actually many places) where entrepreneurs and companies want to be because there is a broad value proposition for them to be here.

]]>http://davidwcampbell.com/2016/12/the-importance-of-skin-in-the-game/feed/1Ensuring there are workers across the labour market spectrumhttp://davidwcampbell.com/2016/10/ensuring-there-are-workers-across-the-labour-market-spectrum/
http://davidwcampbell.com/2016/10/ensuring-there-are-workers-across-the-labour-market-spectrum/#commentsSat, 08 Oct 2016 10:58:51 +0000http://davidwcampbell.com/?p=6719Continue reading →]]>The new immigration pilot worked out with the feds is unique because the Atl. provinces can now attract needed workers across the labour market spectrum – from fish plant workers to engineers. I have had more than a few people question why we would want to attract immigrants into sectors not paying particularly high wages. The logic goes that the firms struggling to find workers should pay higher wages or become more productive. One economist said that the “only way” to reduce our 10% unemployment rate would be for firms to raise their wages to a level that would attract in workers.

In theory there may be some logic to this but in practice there are many other factors at play. Firms in export industries compete in global markets and therefore cost competition is set globally. If input costs increase too much in one location and not another it puts the former at a competitive disadvantage. Productivity is a good thing for sure but many firms still require lots of workers.

Look at the growth in below average wage jobs across Canada between July 2008 and July 2016. This data is taken from the Survey of Employment, Payrolls and Hours (SEPH). The average wage includes overtime. Across the country jobs in below average wages have increased by 10.5%. In New Brunswick below average wage (occupations) jobs decreased by 0.1% – and if you back out health care and social assistance (which, yes, is a slightly below average wage sector because of the many support occupations in there – nursing home care workers, child care workers, etc.), the number has dropped by 7.3%. When you look deeper you will see that many of the high wage occupations are dependent on the state of the local economy (doctors, lawyers, architects, electricians, etc.) so not addressing labour shortages in below average wage occupations drags down the potential of high wage jobs in the economy.

The compounding challenge here is that young New Brunswickers increasingly don’t want to work in ‘lower wage’ occupations. Between 2008 and 2014 there was a 15% decline in the number of persons under the age of 35 declaring annual income of $35,000 or less – a 3x times larger drop than Canada as a whole . At first glance you might say that is a good thing but look at the following graph. Look at Alberta. The strongest economy over the period actually saw growth in the number of young people earning less than $35,000 per year. Why? Because there are lots of jobs in any economy – for better or worse – that pay below average wages. A strong and sustainable economy is one where there are workers to fill jobs across the spectrum – with a healthy upward pressure on wages over time.

If you look at the case of Manitoba it has witnessed record numbers of young immigrants coming in to fill jobs in food manufacturing, back offices and other service industry jobs (it’s no accident they are second only behind Alberta in the chart above). The wage levels aren’t particularly high but they are an order of magnitude higher than what the immigrants were earning before.

]]>http://davidwcampbell.com/2016/10/ensuring-there-are-workers-across-the-labour-market-spectrum/feed/0Millennial self-employment in export-oriented industries: An NB challengehttp://davidwcampbell.com/2016/09/millennial-self-employment-in-export-oriented-industries-an-nb-challenge/
http://davidwcampbell.com/2016/09/millennial-self-employment-in-export-oriented-industries-an-nb-challenge/#commentsTue, 27 Sep 2016 10:38:19 +0000http://davidwcampbell.com/?p=6715Continue reading →]]>I have been thinking a lot lately about entrepreneurship among Millennials. If we want a vibrant and durable economy moving forward we need the next generation of ambitious and growth-focused entrepreneurs to step up. Over the past decade we have witnessed a substantial boost to the government supported services meant to support entrepreneurs – and we have seen an expansion of the private capital available to them. Governments have invested millions in support and expanded the small business investor tax credit program to encourage more investment in startups.

Unfortunately the most recent data we have is from the 2011 NHS but that paints a rather bleak picture of self-employment among Millennials in New Brunswick. The chart below tells the story. It is an index where the country’s workforce as a whole is represented by 1.00. Anything above the line means NB has a higher share and anything below the line means we have a lower share compared to the national workforce. For self-employment in occupations that are only focused on the local market (Lawyers, doctors, vets, accountants), we have a higher share of young people that are self-employed compared to the national workforce but among those occupations that tend to have high concentrations in export-focused industries we are well below the line. Across the country 8.5% of IT workers are self-employed. In New Brunswick it is 2.3%.

In the manufacturing sector (not depicted in the chart) only 30 young people out of the 5,200 working in the sector are self-employed. Across the country there are 4x as many young people in the manufacturing sector classified as self-employed.

Hopefully the numbers have improved since 2011. However, Dr. Haan’s statistic looms large in the background. Those who leave the province are twice as likely to own a business as those that stay.

]]>http://davidwcampbell.com/2016/09/millennial-self-employment-in-export-oriented-industries-an-nb-challenge/feed/0New Brunswick’s missing 35 to 44 year olds: A lesson in demographicshttp://davidwcampbell.com/2016/09/new-brunswicks-missing-35-to-44-year-olds-a-lesson-in-demographics/
http://davidwcampbell.com/2016/09/new-brunswicks-missing-35-to-44-year-olds-a-lesson-in-demographics/#commentsFri, 09 Sep 2016 16:07:47 +0000http://davidwcampbell.com/?p=6711Continue reading →]]>There is a view that youth out-migration is something that can be fixed – like you would fix an old car. The reality is much more nuanced. The following chart shows the New Brunswick population by age cohort relative to the national population. As an example, in 1971 New Brunswick had 8.5% more 0 to 4 year olds in its population (as a share of the total) than Canada as a whole and 3 percent fewer 50 to 54 year olds. If you look at the graphic you will see that not much has changed in the last four decades. New Brunswick still has a higher share of its population under the age of 24 and a higher share of its population over the age of 60.

The population overall has significantly moved to the right – i.e. both NB and Canada are much older now and it has grown much faster across Canada – but the mix in distribution has not changed much.

In 1971 New Brunswick’s largest population gap with Canada as a whole was in the 35 to 44 year old age cohort. In 2015 it remains this cohort and remarkably almost by the same exact percentage share. In 1971 we had 15 percent fewer 35 to 44 year olds in the population than Canada as a whole and in 2015 we had – you guessed it – 15 percent fewer 35 to 44 year olds in the population. 44 years later.

The reality is that this phenomenon is similar in other small provinces and U.S. states. Small jurisdictions end up losing a lot of young people to the large urban centres. The small jurisdictions – such as Manitoba and Saskatchewan – are those that are seeking a significant of inward migration to counter the outward effect.

That may seem counter-intuitive to some people. Why try to bring in younger immigrants when your young sons and daughters are leaving? We have 40+ years of making that same argument. We don’t need immigrants because we have youth out-migration. How has that worked out so far?

As I have pointed out many times before – Toronto has a high net outward inter and intra provincial migration rate. They make up for the loss with 95,000 mostly younger immigrants every year.

No matter how hard it is to get our heads around it is my view that a big boost in immigration should actual lead to more jobs for young, Canada born New Brunswickers. Many of the new immigrants will fill positions that are not being filled now and that should boost output and create more jobs in the local economy.

You would think that 40 years of data would lead to a little new thinking.

]]>http://davidwcampbell.com/2016/09/new-brunswicks-missing-35-to-44-year-olds-a-lesson-in-demographics/feed/2New Brunswick’s $250,000 problemhttp://davidwcampbell.com/2016/07/new-brunswicks-250000-problem/
http://davidwcampbell.com/2016/07/new-brunswicks-250000-problem/#commentsFri, 15 Jul 2016 11:31:48 +0000http://davidwcampbell.com/?p=6708Continue reading →]]>New Brunswick has 59% fewer people who earn $200,000 per year and 63% fewer people who earn $250,00 per year compared to Canada as a whole.

To put that into some kind of context, you would have to look far and wide to find any major social, demographic or economic indicator where New Brunswick had a 60% spread with the rest of Canada. Not literacy, education, poverty or health outcomes. Not median income or any other main economic indicator.

But when it comes to ‘high’ income earners we have a huge gap. And the gap is widening at least at the highest level. In the past five years the national growth rate of those earning $250,000 was 50% faster than New Brunswick.

Does this matter? Well, I think it does. By my estimate just getting to the national average for higher income earners would add some $200 million in provincial government tax revenues each year. And that is grossly understated because it doesn’t account for other sources of tax revenue that would be derived from the economic activity generated by those high income earners (I only looked at the direct taxes off the additional personal income). In other words it pushes the tax burden down the income pyramid.

Now let me be clear. If the price to get more higher income earners means less income for those lower in the income pyramid (i.e. creating more inequality) – that is not acceptable. But I am talking about generating relatively high incomes from creating new wealth from entrepreneurial activity, risk taking and hard work.

How do we do that? We need more ambitious entrepreneurs looking to build markets outside New Brunswick and we need world class companies willing to step outside their comfort zone and take risk.

]]>http://davidwcampbell.com/2016/07/new-brunswicks-250000-problem/feed/1Energy and mining export values down, gypsum, aquaculture and peanut butter uphttp://davidwcampbell.com/2016/06/energy-and-mining-export-values-down-gypsum-aquaculture-and-peanut-butter-up/
http://davidwcampbell.com/2016/06/energy-and-mining-export-values-down-gypsum-aquaculture-and-peanut-butter-up/#commentsSun, 05 Jun 2016 11:11:36 +0000http://davidwcampbell.com/?p=6703Continue reading →]]>A quick look at the international export data for the first four months of 2016 reveals that the value of energy-related exports is down significantly this year so far. The total value of refined petroleum exports, gas exports (mostly LNG) and NB Power exports is down by $869 million this year so far. You have to be careful with this, however, as the lost ‘value from refined petroleum exports could be upstream as the value of oil and gas imports is down by $636 million during the same period. The decline in Canaport exports to New England is likely due to the mild winter.

Other decliners including non-metallic minerals (potash) – no surprise there – and the rest of the declines are quite marginal and could be due more to currency fluctuations than production declines.

On the winners side, Gypsum product exports are up (but in absolute terms by a fairly limited amount). Aquaculture exports are up strongly by $35 million in the first four months. Peanut butter exports are rolling along (snack food). The value of seafood exports is up by $30 million. The value of pulp million exports are up by $31 million.

]]>http://davidwcampbell.com/2016/06/energy-and-mining-export-values-down-gypsum-aquaculture-and-peanut-butter-up/feed/0Learning from Leicester Cityhttp://davidwcampbell.com/2016/05/learning-from-leicester-city/
http://davidwcampbell.com/2016/05/learning-from-leicester-city/#commentsThu, 12 May 2016 13:01:22 +0000http://davidwcampbell.com/?p=6699Continue reading →]]>I think there are lessons to be drawn from the Leicester City Foxes who recently won the 2015-16 English Premier League. The Foxes were 5,000 to 1 to win on the season’s opening day.

I can’t help but take a little jab at my Edmonton Oilers – a team I have followed since they joined the NHL in 1979 (I was 12 at the time). In many country professional sports leagues (like the EPL) whole teams can be demoted if they don’t play good enough to remain in the top league. I suspect if the NHL had that approach (i.e. the Oilers as a team would get demoted to a lower league) you would have far better hockey because teams would be extra vigilant to make sure they put a quality product on the ice. These days teams like Toronto and Edmonton can languish in obscurity and still turn a nice profit for their owners (in fairness I have no idea if Edmonton has been profitable).

One of New Brunswick’s biggest challenges relates to how a small jurisdiction positions itself in a world that is more open and global than ever before. Capital, talent and ideas are more mobile than at any time in our history (at least until the Trump Express hits the Whitehouse) and New Brunswick risks being left behind.

Leicester City shows that an innovative approach, a little luck as well as a version of the Tortoise and the Hare story can help elevate underdogs.

I am a little concerned that New Brunswick is too under the radar from a national economy perspective. If Ontario had our province’s economic performance over the past eight years it would be an international issue. When Alberta’s economic growth fell to zero (and slightly below), the nation’s media was awash in stories. When NB has zero growth for seven straight years (on average) no one notices or they shrug their shoulders and say “that’s just New Brunswick”.

Why this matters is that we need the federal government to be concerned about NB’s economic trajectory and help where it can – in areas such as immigration, our share of national innovation funding, helping promote NB around the world using its global network of trade and investment officers, etc.

We need to attract national and international investment – like we have in the past – if we are too under the radar that becomes more difficult.

We need to attract a lot of talent in the coming years. That too requires a focused effort.

The Economist magazine, after several articles extolling the virtues of Leicester City and drawing much broader lessons for the economy – has piece concluding that “underdogs are overrated”.

A YouTube channel that describes itself as “dedicated to Brazilians wish to one day live in Canada” recently featured an hour and 12 minute conversation with Sergio and Kaísa who recently moved to Moncton where Sergio is taking a course at the NBCC. They would like to stay in Moncton after he finishes his course and the conversation was very positive on New Brunswick and Moncton – both Kaísa and Sergio could see themselves building their careers here.

The YouTube conversation has been viewed over 2,000 times (sorry, folks, its 100% in Portuguese – although they do talk about a new kind of Chiac – their word not mine) that is half English, half Portuguese.

Since Sergio and Kaísa’s free promotional plug for New Brunswick the group’s Facebook site in Moncton has been pinged by numerous Brazilians asking more about New Brunswick and expressing an interest in moving here.

I think it would be kind of cool to attract more young Brazilians here – New Brunswick could use a little more samba.

]]>http://davidwcampbell.com/2016/03/brasileiros-em-new-brunswick-will-a-wave-of-brazilians-help-rebalance-our-demographics/feed/1Growth in the provincial workforce and GDP by Premierhttp://davidwcampbell.com/2016/03/growth-in-the-provincial-workforce-and-gdp-by-premier/
http://davidwcampbell.com/2016/03/growth-in-the-provincial-workforce-and-gdp-by-premier/#commentsFri, 25 Mar 2016 22:30:15 +0000http://davidwcampbell.com/?p=6694Continue reading →]]>Between 1987 and 1997, the years when Frank McKenna was Premier the provincial workforce expanded by 32,000 people and total employment increased by 29,800. Real GDP grew by 11.3%.

Between 1999 and 2006, when Bernard Lord was Premier, the workforce expanded by 21,400 and total employment grew by 24,700. Real GDP grew by 17.8%.

Between 2006 and 2010 when Shawn Graham was Premier the provincial workforce expanded by 10,400 and total employment by 7,700. Real GDP grew by 2.1%.

Between 2010 and 2014, during Premier Alward’s term, the provincial workforce shrunk by 1,300 and total employment dropped by 4,200. Real GDP declined by 0.7%.

Between 2014 and 2015, the provincial workforce has declined by 2,800 and total employment is down 2,100. We don’t know the final tally for 2015 GDP yet – we are expecting a marginally positive number but not outstanding.

I wonder how many people out there still don’t see a connection between the trajectory of the workforce and economic growth?

By the way, if I put up the national numbers you would see roughly the same correlation – the only difference is the workforce nationally has been growing rapidly in line roughly with GDP growth. Between 2008 and 2015, New Brunswick’s workforce declined by 4,100. The national workforce increased over the same timeframe by 1.16 million.

]]>http://davidwcampbell.com/2016/03/growth-in-the-provincial-workforce-and-gdp-by-premier/feed/1Are women or men more at risk from the coming automated economy?http://davidwcampbell.com/2016/02/are-women-or-men-more-at-risk-from-the-coming-automated-economy/
http://davidwcampbell.com/2016/02/are-women-or-men-more-at-risk-from-the-coming-automated-economy/#commentsSat, 06 Feb 2016 01:51:57 +0000http://davidwcampbell.com/?p=6684Continue reading →]]>After a Davos conversation there have been a number of stories recently about which gender is most ask risk from the coming automated economy – driverless cars, robots, etc. It’s an interesting conversation. I took at look at the occupational differences between women and men in New Brunswick to add a little local context to this debate. Most of the findings are not overly surprising but there are a few eyebrow raisers.

For a methodology, I took the share of employment for males and females and then compared the the two with male employment as the base (= 1.00). Simply, anything less than 1.00 means that the female workforce has a lower share compared to men and anything above means they have a higher share.

The table below shows the highest level summary for the top level NOC codes 1-9. As would be expected, females have fewer people in management relative to men (36% less) but they have 2.6 times as many working in business, finance and admin occupations. There are 4.4 times as many females working in health occupations compared to men. On the opposite end of the spectrum, there are 70% fewer females working in natural and applied sciences occupations, almost none in trades and transportation, very few in natural resources occupations and less than half – relatively speaking – in manufacturing occupations.

The more detailed breakdown (link below) reveals some interesting findings at the more granular level. There are significantly more females in senior management roles in health, education and social services compared to men; 33% more financial managers, 95% more HR managers, 43% more banking, credit and investment managers, and three times as many managers in health care.

Females are more heavily employed in administrative occupations (three times as many compared to men). The main outlier – there are 61 times as many females working as medical admin. assistants than men.

Women kick arse in health care – except for NOC 311 Physicians, dentists and veterinarians – where there are 27% fewer females than males. However, there are 35% more female veterinarians, more optometrists, 73% more pharmacists, nearly six times as many females in therapy-based occupations, 5.5 times as many in med. tech occupations.

There are slightly fewer female university professors (21% fewer) but more college instructors (+27%). There are more than 3 times as many teachers.

There are 22% fewer female lawyers compared to men and 70% fewer police officers.

There are 66% more female bartenders – who knew?

There are very few women working in the trades and transportation occupations. 96% fewer working as machinists or related workers. 98% fewer plumbers, 98% fewer carpenters, 96% fewer heavy equipment operators.

There are far fewer females working in virtually all natural resource-based occupations except nursery workers (67% more) and harvesting labourers (83% more). More women work in fish plant occupations (12% more) and labourers in fish and seafood processing (75% more).

]]>http://davidwcampbell.com/2016/02/are-women-or-men-more-at-risk-from-the-coming-automated-economy/feed/2Redux: Does labour follow capital or vice versa?http://davidwcampbell.com/2016/01/redux-does-labour-follow-capital-or-vice-versa/
http://davidwcampbell.com/2016/01/redux-does-labour-follow-capital-or-vice-versa/#commentsMon, 25 Jan 2016 10:51:08 +0000http://davidwcampbell.com/?p=6678Continue reading →]]>Should New Brunswick focus more on trying to attract jobs or on growing the population?An interesting new study out of Indiana has important implications for economic development in New Brunswick.

The researchers looked at whether or not job growth (efforts to foster more jobs) lead to population growth or did having a growing population foster new job growth.

They found that “in the 1970s people followed jobs, but by the 2000s they had stopped.” If the economy was going to grow the workers had to be in place. In other words, the researchers conclude that communities need to be great places to live and attract people and the jobs will come rather than trying to attract jobs to places with tight and shrinking labour markets.

That sounds a lot like New Brunswick these days.

I have been saying all along that there are some jobs that will attract labour. Think Fort McMurray. Sectors such as mining tend to be a magnet for workers. But most industries are not like that. If there isn’t a pool of labour, over time investment and jobs will decline. I would not say this is a universal fact but for places such New Brunswick (and apparently Indiana) this is the case.

The study goes further and suggests the tax incentives used to lure jobs to the state were not well spent and the money should have been used to improve the quality of place and boost population.

I wouldn’t be as stark on this point.

I still believe there is an important role for communities and governments to expose firms to potential investment opportunities in their areas. For example, if a small community has enough local demand for a dentist and there are not a pile of dentists lining up to come, the community should build a business case and use it to convince a dentist to locate there. Likewise if a province has opportunities in shellfish aquaculture, mining, blueberries, etc. it should package and promote those opportunities to investors. If it has gateway infrastructure – roads, ports, airports with opportunities – it should promote these opportunities to investors. If it has low cost energy it should promote this benefit to industry.

If other jurisdictions are offering tax breaks or other forms of subsidy, we may well need to play some version of that game but I believe if we are ‘selling’ real opportunities with tangible value to investors, incentives will be less important.

The idea of trying to lure firms to New Brunswick with cash incentives even as the labour market is shrinking is increasingly problematic. Even if the firms move in they may take workers from existing employers who will then not be able to fill the vacancies.

New Brunswick needs to focus on intentionally growing its population – it’s working age population. This is foundational to ensuring investment and sustained GDP growth is in our future.

]]>http://davidwcampbell.com/2016/01/redux-does-labour-follow-capital-or-vice-versa/feed/2Manitoba and immigration: An interesting case studyhttp://davidwcampbell.com/2016/01/manitoba-and-immigration-an-interesting-case-study/
http://davidwcampbell.com/2016/01/manitoba-and-immigration-an-interesting-case-study/#commentsSun, 17 Jan 2016 10:56:07 +0000http://davidwcampbell.com/?p=6671Continue reading →]]>The Manitoba example is an interesting one for us to consider as we think more deeply about immigration and the labour market. Even though Manitoba has no oil and gas industry and only a fairly small mining sector (less that 3% of total GDP) its economy grew robustly between 2006 and 2014. Not to the level of Saskatchewan or Alberta mind you but still the size of the economy (real GDP) swelled by 20%. New Brunswick, by contrast, saw its total economy grow by only 2% over the same period.

What is interesting is the drivers of economic growth. In Manitoba, manufacturing GDP increased by 14% while decreasing 11% in New Brunswick. Transportation and warehousing GDP up by 12% in Manitoba but down 3% in New Brunswick. The administration and support services sector (where many contact centre jobs are classified) grew its GDP by 8% in Manitoba while declining by 7% in New Brunswick.

If you look at the ‘public sectors’ in comparison to overall GDP growth you see an interesting trend too. Health care GDP and public administration GDP grew strongly in Manitoba but less than the rate of overall economic growth. In New Brunswick, by contrast, health care GDP grew five times faster than overall GDP and public administration GDP grew six times.

But what is really interesting is the correlation between growing industries and immigration. Manitoba, a province only slightly larger than New Brunswick, attracted more than 8 times as many immigrants between 2001 and 2011 (defined as those living in the province in 2011 that arrived in Canada between 2001 and 2011).

But when it comes to the occupations that support export-oriented industries, the multiples go through the roof. Of the more than 18,000 New Brunswickers who worked in manufacturing-related occupations (NOC 9) in 2011, only 175 were recent immigrants (0.9%). In Manitoba, it was 5,515 (one in five of every workers). Manitoba attracted 31.5 times as many workers in NOC 9 compared to New Brunswick over the period.

It’s clear that Manitoba has been attracting immigrants for years to support economic growth.

One final point. Between 2001 and 2011, Manitoba’s employed workforce expanded by 62,000 people. 46,000 of the workers were recent immigrants.

]]>http://davidwcampbell.com/2016/01/manitoba-and-immigration-an-interesting-case-study/feed/0The size of NB’s workforce is smaller now than back in 2008. Only province to shrink.http://davidwcampbell.com/2016/01/the-size-of-nbs-workforce-is-smaller-now-than-back-in-2008-only-province-to-shrink/
http://davidwcampbell.com/2016/01/the-size-of-nbs-workforce-is-smaller-now-than-back-in-2008-only-province-to-shrink/#commentsWed, 13 Jan 2016 11:43:42 +0000http://davidwcampbell.com/?p=6668Continue reading →]]>New Brunswick saw an uptick in job creation in the last few months on 2015 and an overall real GDP growth rate (the final number is not in) of likely something above one percent. That may not seem like much but compared to the average rate of zero since 2008 that is a good step forward.

A lot of folks – me included – now believe the labour market is becoming the biggest drag on GDP growth potential in New Brunswick. As you can see from the chart below we are the only province in Canada that has seen its labour force shrink since 2008. Across Canada the number of people working or looking for work has increased by 1.16 million people. In New Brunswick, it has shrunk by 4,000.

Growth/decline in the size of the labour force (% change 2008-2015)

Source: Statistics Canada CANSIM Table 282-0002.

There is a fairly strong correlation actually between labour force growth since 2008 and GDP growth. NB has faired the worst among the provinces. Nova Scotia has been only a little better and PEI has actually had the best GDP growth rate among the four Atlantic Provinces along with its 5.7% increase in the labour force.

How do we grow the labour force? Either by encouraging more NBers to join or by attracting folks from outside the province or country to come in. The labour force participation rate (the percentage of adults that are either looking for work or working) has actually gone down from 2008 to 2015. This is mostly a function of age. Only 11 percent of folks over the age of 65 are in the labour market (participating) and while that is up from 6.5% in 2008 there is some question about how many more in this age group will join the labour market.

Among those in the prime age group 25-54, 87% are in the labour market (in 2015). There is not likely much more opportunity to expand that group.

Expanding the labour market will be very important if we are to get the economy moving in the right direction.

]]>http://davidwcampbell.com/2016/01/the-size-of-nbs-workforce-is-smaller-now-than-back-in-2008-only-province-to-shrink/feed/1The importance of international investment into New Brunswickhttp://davidwcampbell.com/2015/12/the-importance-of-international-investment-into-new-brunswick/
http://davidwcampbell.com/2015/12/the-importance-of-international-investment-into-new-brunswick/#commentsWed, 30 Dec 2015 18:35:18 +0000http://davidwcampbell.com/?p=6659Continue reading →]]>Long time readers of this blog will know of my focus on positive investment flows as the underlying foundation for economic development. Because we are a small province, etc. most of the savings accumulated in New Brunswick flows out of the province to fund economic development elsewhere. If you think about all the public pension monies (provincial and national) that are collected each year in New Brunswick they mostly flow outward for investment elsewhere and then flow back as needed to meet pension obligations. The Canada Pension Plan, as one example, is investing in toll highways in Australia. This also applies to private savings. If you look at where your RRSPs are invested you will find very little if any investment in your home province with the exception of some indirect investment (i.e. if you have shares in a bank and that bank has branches in New Brunswick).

I’m not complaining about the outward investment flow. Just like people and ideas – the global mobility of capital is now easier and safer than ever. It just puts an onus on us to ensure there is more than enough capital flowing back into New Brunswick in the form of investment in our firms and in economic projects across the province.

This investment can come in many forms. Like the CPP example above, it can involve investors putting money into low risk publicly back infrastructure projects but more importantly it needs to flow into firms and into greenfield multinational investments in plant, equipment and IP in New Brunswick. Firms investing in the mining sector, manufacturing, professional services, IT, contact centres, etc. that are based on export markets (Canada and international) boost employment, GDP and tax revenue.

New Brunswick needs more of this investment. While the interprovincial foreign investment flow data is very limited, we have good data at a national level. Across Canada, foreign owned companies have been pumping in new investment, expanding employment and growing their footprint. According to Statistics Canada, from 2010 to 2013, foreign majority-owned affiliates in Canada added more than 150,000 net new jobs between 2010 and 2013 including 20,000 in the mining sector (which has likely retrenched some since 2013), manufacturing (18,500), wholesale trade (26,000), professional services (20,500), administrative and support services (11,500) and accommodation and food services (23,000). The figure below shows the percentage change in total employment by 2 digit NAICS code.

While we don’t have the NB data, it is fair to say that multinational investment is not rushing into the province these days. The wholesale trade industry – adding 26,000 jobs from foreign majority-owned affiliates across Canada – has been shrinking in New Brunswick. Manufacturing investment is way down. Mining GDP has been cut dramatically. Even ICT GDP has been relatively flat in recent years.

So how do we encourage national and international investment? Well, it can come through greenfield investment (i.e. a firm comes here and sets up a new operation to service national or international markets) or it can come through investments in NB firms (equity stakes, outright acquisitions, etc.) which connect the NB firms into global supply chains and helps build international markets. According to Statistics Canada, foreign majority-owned affiliates across Canada account for more than 50% of international merchandise exports. While I can’t give you the NB share it is likely in the 10% range.

Why would international firms want to invest here? We need to have a value proposition for investment.

Below is the chart I used in my presentation earlier this week to make the case that we can’t use outward migration of New Brunswickers as a reason not to attract immigrants. If you look at the number of people that move into Greater Toronto each year and subtract the number that leave – you get a negative 23,000 in an average year between 2002 and 2014 (a long sample size). That is a negative inter and intraprovincial migration rate of 428 per 100,000 people living in the community

If you run the same numbers for New Brunswick over the same period you get a negative migration rate with the rest of Canada of 208 per 100,000. On a net basis, Toronto loses twice as many people each year than New Brunswick to migration elsewhere in Canada.

You don’t hear Torontoians lamenting the loss of their young people to other jurisdictions. There are no front page stories in the Globe and Mail of the tragedy of outward migration from Toronto. No laments from the Mayor of Toronto. No financial programs targeting young people to keep them at home.

Most people understand there are myriad of reasons why people move to and from Toronto. Besides, over that same period, Toronto attracted an average of 92,500 immigrants per year – 4 times as many as were lost through interprovincial migration. If New Brunswick had the same ratio of immigrant inflow to outward migration within Canada as Toronto, it would mean 6,300 immigrants flowing into New Brunswick per year.

I’m not suggesting we shouldn’t try and keep young people here. I’m a big supporter of experiential learning, apprenticeships, co-op education and doing a better job of exposing New Brunswickers to the jobs available here and now in the province. For example, I understand it is getting harder and harder to recruit loggers. I suspect a lot of New Brunswickers might find that an interesting career if they gave it a long hard look. You work in nature, earn good money and work hard for a living. But I suspect there aren’t many guidance counselors pitching ‘logger’ to high school students.

But at the end of the day people are more mobile than ever before and I don’t think we should spend too much time lamenting their loss. Many come back eventually and as I have said before many of the most interesting people I meet in New Brunswick have spend a large block of time outside the province (my colleague Susan Holt is a perfect example of this).

The overriding objective is to ensure there is enough labour to meet the demand in New Brunswick. In the last week alone I have heard about a laundry service in Saint John, a manufacturer in northern NB, a firm looking to hire loggers in central NB and a restaurant in northwestern NB that all can’t find workers.

]]>http://davidwcampbell.com/2015/12/the-great-toronto-out-migration-problem/feed/1Is self-employment a bad thing or a potential boon for New Brunswick?http://davidwcampbell.com/2015/10/is-self-employment-a-bad-thing-or-a-potential-boon-for-new-brunswick/
http://davidwcampbell.com/2015/10/is-self-employment-a-bad-thing-or-a-potential-boon-for-new-brunswick/#commentsSun, 25 Oct 2015 12:30:23 +0000http://davidwcampbell.com/?p=6647Continue reading →]]>There was an interesting article in the Economist magazine this week about the rise of self-employment in Britain and the conclusion by economists that this is basically a bad thing. This runs somewhat counter to the “start-up” narrative that has become all the rage. We want people to “start their own businesses” but we think self-employment is a bad thing?

Of course these are two different concepts – in theory. The sexy start-up is an attempt to build a business based on a novel idea or niche market opportunity. Its goal is to create new wealth. Most self-employment is meant as a source of income and in many cases – think folks who sell stuff at the farmers’ markets – it is purposely meant to be a part time gig.

First, here are the numbers for New Brunswick. The average income from ‘self-employment’ (as derived in Statistics Canada Neighbourhood Income Survey) in New Brunswick is $13,072 per person reporting self-employment income. Remember on this survey a person can be reporting both wages and salary income (day job) and self-employment income (farmers’ market). Nevertheless, the spread between the two sources of income is substantial. In 2000, the average self-employment income was 53% below wages and salary income. By 2013 that gap had swelled to 65%. Again, this is hardly apples-to-apples as lots of income derived through self-employment may not be reported and as mentioned above the type and duration of the work is likely much less.

It is also important to point out the spreads between self-employment and wage income across Canada are similar to New Brunswick (64% in 2013) so this is not just New Brunswick – but on the surface it would seem the economists are right.

However, I think we need to reconsider ‘self-employment’ particularly as most economists are predicting a sharp rise in ‘contractor’ workers (think Uber and Shopify) in the coming year in line with the growing number of Internet-based work to worker matching services.
New Brunswick can sit back and do nothing or we can try and get in front of this thing to benefit New Brunswickers.

Since 2000, the number of persons reporting self-employment income in New Brunswick is actually down by six percent while rising by 12 percent across Canada.

So here’s the deal. New Brunswick has pockets of high unemployment around the province and dozens of communities that desperately do not want their people to leave. Why can’t self-employment fill the gap? I’m not talking about self-employment based on local markets but based on external markets. There are dozens of firms right now looking for workers to do the job from home (or it could be from small office environments set up in small towns). These are mostly full time jobs and that offer fairly good wages (someone posted that the Shopify jobs are starting around $40,000/year).

]]>http://davidwcampbell.com/2015/10/is-self-employment-a-bad-thing-or-a-potential-boon-for-new-brunswick/feed/3Immigration as a driver of economic growthhttp://davidwcampbell.com/2015/08/immigration-as-a-driver-of-economic-growth/
http://davidwcampbell.com/2015/08/immigration-as-a-driver-of-economic-growth/#commentsWed, 26 Aug 2015 14:53:59 +0000http://davidwcampbell.com/?p=6640Continue reading →]]>I keep hearing folks ask the question “how come we need more immigrants when we have high unemployment and young people moving out west for jobs”? The answer to this question is one of the keys to us getting our economy back on track.

Most of us will not remember the last time there was a real, sustained immigration wave into New Brunswick because it was around the middle of the 19th Century. We had a little spike right after WW2 as war brides were brought over and other immigrants were still trying to leave Europe. But that quickly dropped down to levels well below the average for the country as a whole. We had a little spike in immigration in the early 1970s (an average of nearly 2000 per year between 1972-1976) which worked out to a rate of approximately 250 per 100,000 population (still well below the country as a whole). Then we dropped right back down to less than 100 immigrants per 100,000 and stayed there for more than 20 years – even as immigration into Canada remained at a steady and even growing pace by the 1990s.

If you are of a certain age you may remember the product of that mini-wave in the early 1970s. Some of those immigrants ended up working in government, some started successful businesses and others set up successful farming operations.

Now we had relatively high unemployment rates in the early 1970s. We also had young people “goin’ down the road” to find work in Toronto. We also had a wave of young people joining the workforce every year. Yet we still allowed in immigrants and many of them stayed and are here today.

In 2015 we have relatively high unemployment (although low by the standards of the mid 1970s) and we have young people going down the road. What we don’t have is a wave of young people joining the workforce every year. In fact, the young workforce is shrinking and has been for years.

Labour and capital are the two main drivers of economic growth. For most industries capital follows labour (think ICT). For a discrete number of industries labour follows capital (think Fort McMurray). If you think about many of New Brunswick’s key industries – from sawmills to fish plants to manufacturing to contact centres – if the labour pool dries up – so will the capital.

So, immigration becomes key to our economic renewal. Not necessarily Phds or highly skilled labour (although we will need some of that) – we need labour to fill the needs of industry – across the wage and skill spectrum. And, by the way, not just to fill the needs of existing industry but we also want to grow the economy and employment base of the province.

The next time someone tells you we don’t need more immigration, you now have some food for thought.

]]>http://davidwcampbell.com/2015/08/immigration-as-a-driver-of-economic-growth/feed/2New Brunswick, if……http://davidwcampbell.com/2015/08/new-brunswick-if/
http://davidwcampbell.com/2015/08/new-brunswick-if/#commentsSun, 02 Aug 2015 12:33:12 +0000http://davidwcampbell.com/?p=6633Continue reading →]]>The Economist magazine has an interesting segment this week called “The World, if….” which provides a series of stories similar to its The World This Week but only at some point in the near future after Hillary Clinton is President. It is a fun but serious look at one possible future.

It got me thinking about New Brunswick. Specifically, New Brunswick, if we are able to address some of our foundational challenges in the next few years. What would New Brunswick look like….

-If we get serious about immigration and demographic renewal.
-If we create an environment where high growth potential entrepreneurs want to build their businesses.
-If we address systemic challenges with the workforce.
-If we shed our fear of multinational firms and embrace the fact we are part of a global economy.
-If we are able to strategically develop our natural resources with a limited environmental impact and a high economic return.
-If we evolve our partnership with the federal government to one with a bold vision of growth for New Brunswick – not one of “ensuring comparable public services” through transfers.

If we got these fundamentals right, New Brunswick would be a different place than it is today. It would be a place of growing multiculturalism, where dynamic and ambitious entrepreneurs from Minto to Mumbai would want to come and build export-based businesses. Where key export-oriented industries had certainty that the future workforce would be in place giving them clarity for their business and investment plans. Where the resources sector would be creating high paying jobs and high value tax revenue for governments. Where are urban centres would be growing and thriving. Where communities around the province would be growing and grappling with the problems of growth – not the problems of decline.

Where the provincial government could be looking to cut tax rates as a dividend arising from growth not increasing them as a response to stagnation and decline.

Yes, housing costs would be rising. Yes, wages would be rising. Yes, some industries might be more challenged than others. But, in the end, New Brunswick’s challenges would be related to managing economic growth not – as is the current reality – managing economic stagnation and population decline.

]]>http://davidwcampbell.com/2015/08/new-brunswick-if/feed/0Why are we not promoting ‘homework’?http://davidwcampbell.com/2015/08/why-are-we-not-promoting-homework/
http://davidwcampbell.com/2015/08/why-are-we-not-promoting-homework/#commentsSun, 02 Aug 2015 11:02:03 +0000http://davidwcampbell.com/?p=6630Continue reading →]]>There is an excellent article in The Economist magazine this week about the rise of the freelance ‘bughunters’. These are folks who get paid to find bugs that hackers use to break into websites and secure networks. There are tens of thousands of people that work in this area from home. I know a guy in Fredericton that does it from his basement in the evenings.

This is a recurring theme on this blog. There are now millions of jobs that can easily be done from home – some requiring limited skills and other requiring very high skills but the common denominator is that they can be done from anywhere. New Brunswick seems to have high unemployment in certain areas around the province – why are we not doing a better job at promoting and exploiting freelance and home-based work as an economic development effort?

Enterprise Rent-A-Car was looking to hire 100 or more people in New Brunswick at nearly $15/hour, full time work to take calls from home. I haven’t heard recently but they were promoting in Moncton, Fredericton and northern NB but were struggling to find workers.

IMO, this is a golden opportunity. We need more people working in New Brunswick, paying taxes and contributing economically to our communities. That is the fundamental challenge for our economy and ultimately for the fiscal sustainability of our province moving forward.

If we don’t want people to move to the jobs, we should bring the jobs to the people. There are millions of jobs that could be done in New Brunswick from home and – as the NHS data shows – we are at the lower end of the spectrum for home-based work.

]]>http://davidwcampbell.com/2015/08/why-are-we-not-promoting-homework/feed/0On higher wages and more taxes – a few thoughtshttp://davidwcampbell.com/2015/07/on-higher-wages-and-more-taxes-a-few-thoughts/
http://davidwcampbell.com/2015/07/on-higher-wages-and-more-taxes-a-few-thoughts/#commentsWed, 15 Jul 2015 12:04:50 +0000http://davidwcampbell.com/?p=6621Continue reading →]]>I have interesting conversations in my role here with GNB. Lots of folks offer a wide variety of commentary on what government needs to do to get the economy moving in the right direction.

Most people talk about the need for “high wage” jobs to “keep our young people home”, etc. etc. etc. but they don’t have a clear idea what that really means. The following table shows the number of workers by sector in New Brunswick (3-digit NAICS) and how average employment income in that sector compares to the provincial overall average employment income.

You will notice that eight of the top 25 sectors by employment are publicly funded industries. You will further note that all but two of them offer well above wages. We can have an argument about why this is the case but at the end of the day it is really hard to see how you will see any employment growth in those sectors without overall population and GDP growth. Public services respond to growth in demand which should correlate to population growth over time (with adjustment for demographic trends).

You will also notice the 16,000+ high wage professional services jobs in New Brunswick – again mostly serving local demand in New Brunswick. If the population is not growing, don’t expect the demand for lawyers and doctors and electricians to increase.

This bolsters my case for a big increase in the population under 40 in New Brunswick. As I have argued many times before – while there are some chicken and egg challenges here at the end of the day 1,000 new families creates the demand for somewhere in the range of 900 new jobs – nurses, doctors, teachers, electricians, lawyers, etc.

The other statistic that I wanted to share with you this morning is the average income taxes paid by age cohort in New Brunswick as this also bolsters my argument that we need to see a significant boost in the population under the age of 40 in New Brunswick. The prime tax paying years for the average New Brunswicker are between the ages of 35-54. The number of people employed in those age cohorts is dropping as well as in the cohorts that will be moving into those age brackets in the coming years. We need to back fill the pipeline of younger workers that will provide the lion’s share of taxes in the years ahead.

]]>http://davidwcampbell.com/2015/07/on-higher-wages-and-more-taxes-a-few-thoughts/feed/2Attracting high growth potential entrepreneurs (HGPEs) to New Brunswickhttp://davidwcampbell.com/2015/07/attracting-high-growth-potential-entrepreneurs-hgpes-to-new-brunswick/
http://davidwcampbell.com/2015/07/attracting-high-growth-potential-entrepreneurs-hgpes-to-new-brunswick/#commentsFri, 03 Jul 2015 10:55:58 +0000http://davidwcampbell.com/?p=6616Continue reading →]]>I just read that there is an incubator in Colorado focused on start-ups developing products and services for the emerging cannabis industry. This makes sense given Colorado’s laws related to the industry. It is a strategic advantage that most other states do not have.

I have written about this before but I think we need to evolve our thinking about start-up incubators/accelerators to reflect this trend towards specialization. There are incubators supporting green technologies, social media, the industrial Internet, food, and many others. In most of these cases a targeted value proposition is developed to attract high growth potential entrepreneurs not only from the local area but from across the country and beyond.

Imagine a smart grid incubator in New Brunswick that was attracting entrepreneurs from across North America to test their smart grid ideas here? That would be a smart way to leverage the NB Power/Siemens partnership for greater economic value for the province.

In truth we could look at other regional advantages – how about wood-related startups? Or fish? Or social media? Or contact centres? We have the highest concentration of contact centre workers in North America and very few technology-based start-ups (if any currently) developing products/services to fill niche spaces in that market.

Ultimately my concern is simple. If you have all this incubation and support infrastructure around the province but a limited pipeline of HGPEs we won’t realize the potential.

]]>http://davidwcampbell.com/2015/07/attracting-high-growth-potential-entrepreneurs-hgpes-to-new-brunswick/feed/1Looking for the rumours of gloryhttp://davidwcampbell.com/2015/06/looking-for-the-rumours-of-glory/
http://davidwcampbell.com/2015/06/looking-for-the-rumours-of-glory/#commentsTue, 30 Jun 2015 13:31:25 +0000http://davidwcampbell.com/?p=6612Continue reading →]]>I’m reading Bruce Cockburn’s biography this week so I have his music running through my head – hence the title of this blog. Anyone of a certain age will know the song and its meaning.

I’ve been grappling with the concepts of optimism as a precursor to economic growth. My old friend David Jonah tells the story of the “Greater Moncton: We’re Okay” campaign from the mid to late 1980s. They had an acute awareness that in order for Moncton to turn itself around the people of the community needed to have an optimism about the future. If entrepreneurs were optimistic, they would invest. If people were optimistic they would stay and build their careers. If governments were optimistic they would invest to support future private sector growth.

There is a lot of negativity in New Brunswick these days. It’s coded into social media and even mainstream media. Yet at the same time we read that 99 percent of Riverviewians are satisfied with their quality of life in New Brunswick.

So there are at least two competing narratives here.

First, things have never been better in New Brunswick. As the boomers head into retirement they have more money than any generation in history – less than their counterparts across Canada – but still more than the past. The unemployment rate (and the employment rate) is low by historical standards and I would argue if you back out the seasonally unemployed (not the same as seasonally adjusted employment but I’ll save that for another day) the ‘real’ unemployment rate is much lower (i.e. the share of the adult population that is ready, willing and able to work at any given time).

The second narrative is that New Brunswick is on the verge of collapse. People can’t sell their houses, young people are still leaving the province at a fast clip, the overall population is in decline, the public sector is in a large deficit heading towards a cliff and there is no hope for the future.

Long term readers of this blog will know of my aversion to dumbing things down to binary choices – something is either good, moral, righteous, etc. or bad, evil, toxic, etc. That is where the paid and vested interests want to take public policy arguments but the rest of us just get caught in the vortex.

New Brunswick is not on verge of collapse but we are not in the nirvana that should drive a 99% happy with quality of life rating. People need to understand that there are deep and structural trends that will fragment New Brunswick’s quality of life proposition in the future. If we do not get our population growing again and if the economy doesn’t start to grow again at a moderate growth rate – it will ripple through our society.

And there are ways to address this. Maybe there are rumours of glory. Maybe we could attract a lot more young immigrants. Maybe we could attract a lot more foreign students as a pipeline for the future workforce. Maybe we could develop our natural resources in a way that people would be comfortable with. Maybe we could drive an urban growth agenda. Maybe there are ways to expand our tourism sector.

]]>http://davidwcampbell.com/2015/06/looking-for-the-rumours-of-glory/feed/0Dispatches from the road – NYC editition: Notes on the NB brandhttp://davidwcampbell.com/2015/06/dispatches-from-the-road-nyc-editition-notes-on-the-nb-brand/
http://davidwcampbell.com/2015/06/dispatches-from-the-road-nyc-editition-notes-on-the-nb-brand/#commentsMon, 01 Jun 2015 12:45:42 +0000http://davidwcampbell.com/?p=6601Continue reading →]]>I’m in the Big Apple for a few days’ vacation and I stumbled across a few things of interest. First, over the last 10 years there has been roughly $1.4 billion worth of international salmon exports from New Brunswick the vast majority to the United States. Over that same period the total value of salmon exports from Nova Scotia has been $21 million.

Yet, three times yesterday I read on menus about Nova Scotia lox and salmon including at the market last evening. In all likelihood 98% of the salmon from east coast Canada consumed in New York is from New Brunswick but it is branded as Nova Scotian.

The other interesting observation is this Poland Springs bottled water. It’s everyone in New York City. In fact it is by far the most dominant brand of bottled water and it is clearly identified as coming from Maine. On the side of the bottle is a list of all the small communities in Maine where the water comes from.

Now I understand we have lots of water in New Brunswick – we don’t know how much as I am told – but no firm is bottling it and branding it as NB water in Toronto or Montreal. Should we be promoting water as an economic development opportunity? The brand component comes as a side benefit.

New Brunswick is a small place – smaller than dozens of cities across North America. But there are lots of small places that have branded themselves well particularly related to specific natural resources – food, wood, etc. Maybe we should give more thought to how we can modestly expand our brand using the products that come from here.

]]>http://davidwcampbell.com/2015/06/dispatches-from-the-road-nyc-editition-notes-on-the-nb-brand/feed/1Don Draper gets his mojo back: Lessons for NBhttp://davidwcampbell.com/2015/05/don-draper-gets-his-mojo-back-lessons-for-nb/
http://davidwcampbell.com/2015/05/don-draper-gets-his-mojo-back-lessons-for-nb/#commentsThu, 21 May 2015 11:08:31 +0000http://davidwcampbell.com/?p=6598Continue reading →]]>I don’t know if you watched the Mad Men series but I thought the finale was quite interesting. From the very first episode we were led to believe that the life of a mad man was intense but ultimately terminal as the show opening every week shows the silhouette of (presumably Don) someone falling to their demise off a building as advertising images flicker in the background.

The finale pushed us in that direction. Near the very end we see Don calling Peggy from a payphone and decrying his life and the meaninglessness of it all. He had gone to a hippy commune to find himself but it only got worse. Peggy suggests he shouldn’t be alone right now and worries about Don’s life.

She tells him there is a lot to live for – doesn’t he want to come back and work on Coca-Cola? For a moment we are led to believe that not only is that idea not appealing to Don – in fact it is that idea that has led him to his demise.

Then in the second to last scene, Don is doing yoga with the hippies and the camera slowly zooms in on Don’s face. We see a big grin appear on his face and, then, the scene cuts to the most famous Coca-Cola advertising campaign of all time – “I’d like to buy the world a Coke” with a bunch of hippies holding bottles of the fizzy drink talking about peace, love and nirvana.

My wife thought it was a strange ending but I thought it was perfect.

Don’s real problem was never the women, drink, etc. In the context of the show, it was that he felt he lost his mojo. In the depths of despair and in the company of those strange hippies he got his creative inspiration back – another carousel moment – the x factor that made him the king of Madison Avenue. We are left to conclude – deliciously – that he goes back to McCann and creates the most successful and famous advertising campaign of all time.

I might be wrong about this and I purposely didn’t Google it because I want to believe that was the point. How do you generate creativity – inspiration – innovation – moments of great genius? Whether it is an inventor, artist or mad man – what is the alchemy that leads to breakthrough moments?

We need this in New Brunswick. That are so many good people and organizations doing interesting things but when we look at the big picture we are in need of a breakthrough – a Sputnik moment – a Don Draper Coca-Cola moment.

Our economy is flat. Our population is stagnant. If the demographic trend continues on its current course we are destined to lurch from crisis to crisis over the next 25-30 years.

We need to significantly boost our population – particularly the under 40 population to balance our demographic situation. We need to boost our GDP at least at a moderate level to ensure we can afford the public services and infrastructure we care about. We need more innovation, more high growth entrepreneurs – more optimism.

In 2006 the Self-Sufficiency agenda warned that we must increase our population by 100,000 by 2026. Nearly 10 years later there is less appetite for population growth now than back then. Economists and economic policy gurus were warning back then about the weak GDP growth and its long term impacts on our fiscal situation. Now we are in our seventh year with zero real GDP growth and while there continues to be some voices warning about this – there isn’t much urgency about it.

I have been writing and thinking about this stuff for years and I feel a little Draper-esque (without the side effects). I can’t seem to formulate that single, unifying concept that will bring light bulbs over the heads of those that need a light bulb moment.